By Hugo Harris
Despite a promise in Chancellor Philip Hammond’s Autumn Statement to ban “letting fees to tenants as soon as possible,” many Durham letting agents are still planning on demanding administrative charges of up to £180 (£150 plus VAT) per student for the 2017/18 academic year.
Agents such as Q Student, Robinsons, and JW Wood do not require the payment of any administrative charges, but Harringtons, Bill Free Homes, Hope Estates, Morgan Douglas, and Frampton and Roebuck are charging significant fees.
Bill Free Homes’ costs are among the dearest at £180 (£150 plus VAT) per student.
The website of Bill Free Homes, who have been providing student accommodation in Durham since 1996 and were named Student Letting Agency of the Year in 2014 and 2015, say that “in order to meet rising demands and more legislation, we feel that the only way to deal with this is to levy a charge, so as to ensure that we have the right amount of highly trained staff in place to deal with the rising expectations of both tenants and the law.”
Durham Students’ Union (DSU) launched their “Stop-Think-Sign” campaign last year on this issue.
Community Officer, Jo Gower, said at the time: “Given that students are being panicked into early signing and are often completely new to the rental market, it feels like letting agents are taking advantage of tenants who have relatively little power to object to high prices and additional fees, or to make choices about which letting agent to use.”
Following the Chancellor’s Autumn Statement, she added that “in support of our Advice Service, I will also put pressure on agents in Durham to cease charging admin charges before they are required to do so. We have excellent agents here in Durham and I am confident many of them will see this as a great opportunity to lead the way in the market.”
As of February 2017, there is still scant information as to when the Government’s proposed ban on letting agent fees will be enforced. It was announced during a House of Lords debate in January by Lord Bourne of Aberystwyth that a consultation on the matter will be launched in either March or April, however, this schedule has led Letting Agent News to believe no ban will be in place until 2018.
As This is Money writer Sarah Davidson confirmed, agents are under no obligation to scrap any of letting fees until the outcome of the Government’s consultation is revealed.
Gillian Guy, Chief Executive of the Citizens Advice charity, has said that a ban “needs to be enforced sooner rather than later, or letting agents will continue to cash in while they still can.”
Letting agents, on the whole, reacted negatively to the news of the ban last year. The Chancellor’s announcement resulted in a 13 percent drop in the share price of Foxtons, the high-end London estate agency.
David Cox, managing director of the Association of Residential Letting Agents (ARLA), has suggested that “if (letting agent) fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents. The banning of fees will end up hurting the very people the Government intends on helping the most.”
The experience of Durham students in regards to letting agent fees might not be as bad as some tenants throughout the rest of the country.
A tenant in Bristol told the Debrief that she encountered fees which were as much as “£540 per person.”
Nevertheless, George Stanbury, founder of the Durham for Accessible Education group, called the costs “wholly unnecessary.” He also noted that they contribute to the many unseen expenditures that erect barriers to affordable education: “Students are already facing above-inflation rent increases, diminishing financial aid and the prospect of a lifetime of debt, and so this comes when students need all the support they can get. It is a shame that letting agents who charge students are not concerned by the extra financial pressure they place on the students they deal with.”
He claimed: “Letting agents provide little or no detail about why admin fees are charged and this lack of transparency is a key reason the government has committed to banning such fees for tenants.
“Finding student accommodation is a tiring process and should not be made more stressful by placing students in financial difficulties through arbitrary charges. Ahead of this ban, we call on Durham’s letting agents to stop charging students in such an unreasonable, unaccountable manner.”
Jo Gower earlier highlighted the importance of tackling agency fees in Durham: “With college accommodation fees at an exorbitant level (above £7,000 per year) and tuition fees on the rise, students are being squeezed from all angles.”
“In addition to the extra costs of the Durham experience (gowns, formals, and extracurricular activities), these growing costs are having an impact on students from less well-off backgrounds and making the University even less accessible”.
Photograph: Arthur Dimsdale