Moving tips

The dangers of NOT using a lettings agent

By

Zoopla

By
Zoopla

Thinking about moving to a new rental property without the help of a lettings agent? Here we look at why that may not be the wisest approach.

Moving home is a costly business, but while you may be tempted to save on fees by bypassing the lettings agent, this could be false economy, as a good agents can add value and mitigate risks.

In this guide we take a closer look at what lettings agents actually do and find out the key reasons it can make sense to use one.

What services will a lettings agent provide?

1. Show you around potential properties to rent.

2. Ensure your deposit is held with one of the tenancy deposit schemes.

3. Offer you protection by belonging to a professional association with a strict code of practice, such as ARLA Propertymark.

What does this mean? David Cox, chief exec of ARLA Propertymark, says: ‘Members of the scheme are qualified in all regulations governing the sector and ensure there is redress if best practice isn’t always followed.’

Should the worst happen, and an agent goes bust, ARLA Propertymark will reimburse landlords and tenants of any losses. This can be a real benefit, as less scrupulous landlords could close down or run off without registering the deposit.

4. Offer protection by being a member of an Ombudsman redress scheme.

What does this mean? It can be a big help if anything goes wrong with the tenancy.

If you are not happy with your agent – or satisfied with how they have dealt with a complaint – you can escalate it to the Ombudsman, who will adjudicate impartially for free, and come to a binding decision.

The Ombudsman has the ability to award up to £25,000 in damages and compensation.

5. Will support you until you move into your new home and beyond if they manage the property too.

What does this mean? Lettings agents have a duty of care to the tenant. They will discuss the tenancy agreement with you and ensure you understand your responsibilities. 

They can also help set up utilities and council tax, and will be on hand to answer any questions you have during the tenancy.

6. Will help make sure the landlord follows through on their promises.

What does this mean? If the landlord delays maintenance works that are stipulated in the contract, a lettings agent will fight for this to happen on your behalf.

7. Can help ensure that any maintenance emergencies are dealt with promptly and efficiently.

8. Will check the landlord complies with all the relevant legislation, including tenancy agreements, inventories and gas safety certificates.

9. Some agents work with credit reference agencies so that tenants’ rental payments appear on their credit scores.

Why does this matter? This helps tenants build up a credit score for when they apply for a mortgage. For example, lettins agent Vesper Homes works with Experian. A landlord will not be able to do this. 

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The dangers of not using a lettings agent

We asked some property experts to explain why tenants could be putting themselves at a disadvantage if they don’t use a lettings agency when moving to a new rental property. This is what they came up with: 

1. James Cameron, director of property management company, Vesper Homes:

"It’s important to go through a lettings agent when renting a property if you possibly can because of the added level of protection you get. A lettings agent will ensure your deposit – usually a not inconsiderably few thousand pounds – is correctly protected.

"While a lettings agent may represent the landlord, they have a duty of care for all tenants, and must ensure the landlord follows through on their promises. They will be there every step of the way until you move in or, if they also manage the property, they will be there for the duration of the tenancy."

2. Sam Mitchell, CEO, online estate agent, HouseSimple.com:

"Using a lettings agent will ensure you have a watertight agreement with the landlord. The agent will make sure the landlord is complying with all the relevant legislation, such as providing an up-to-date gas certificate. They will also take care of all the paperwork, including drawing up the tenancy agreement and carrying out an inventory. They will ensure your deposit is paid into a secure deposit protection scheme.

"If the property is managed by the lettings agent, they should sort out any maintenance issues in a timely manner, as well as acting as the middleman in any disputes with the landlord."

3. Dorian Gonsalves, CEO of Belvoir:

"By renting a property through an agent, tenants can initially liaise with the agent to deal with any problems, but if matters are not dealt with to their satisfaction, they can they access the ombudsman redress scheme for free. The ombudsman will then investigate and adjudicate, and may find in their favour if there is an issue. If anything goes wrong with a private landlord, the tenant will find themselves with no-one to turn to – and nothing they can do, other than seek redress through the courts.

"A lettings agent will liaise with the landlord on behalf of the tenant, so any emergency and standard maintenance issues are dealt with promptly and efficiently. An agent will also make sure the tenant is not made responsible for any parts of the property that they are not legally responsible for.

"An agent can ensure that all matters of legal compliance are dealt with, including things such as deposits, tenant agreements and comprehensive inventories to help avoid issues at the end of tenancies.

"Having an agent on board can help to make tenants feel secure, knowing the property they are renting complies with health and safety regulations."

4. James Davis, founder of online lettings agency, Upad:

"Given the regularity with which tenancy agreements, and the standard clauses within them, change – and the frequency of legislative changes that impact the lettings market – the important of using a member of ARLA Propertymark cannot be underestimated.

"By engaging with a properly qualified agent, you can be assured of having access to the most up-to-date information, and access to an expert who is bound by a commitment to delivering best practice."

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What are the downsides of using a letting agent?

While there are plenty of reasons why it makes sense to use a lettings agent, there are downsides.

Perhaps most pertinently, dealing directly with a letting agent could be costly, as you could be charged hefty lettings agency fees (see below). A lettings agent is also more likely to try and bump up the rent at renewal time.

In addition to this, there is a risk of information getting ‘lost in translation’ as it passes from you to the landlord, via the lettings agent. 

What will a lettings agent charge?

At present, tenants can be charged fees for a range of things, including credit checks, reference checks and immigration checks at the outset.

If the property is also managed by a lettings agent, there could be a range of costs during the tenancy, such as fees to amend a contract (if you want to swap a housemate, for example), as well as unpaid rent fees and early termination fees. There will also be fees to renew the contract at the end of the tenancy agreement.

Can you negotiate on costs?

  • If there is little interest in the property, it is worth seeing whether the lettings agent may be willing to reduce its fees.
  • If the lettings agent refuses to negotiate and the fees seems high, you can opt to find another property and another lettings agent.
  • If you are looking to save cash, online lettings agents charge lower fees than traditional lettings agents.

Changes to lettings agent fees

While costly lettings agent fees have been an issue for some time, there are signs that things are changing for the better.

In the Queen’s Speech last year, the Government proposed a ban on lettings agent fees charged to tenants. As yet, this ban has not been introduced in England, though it could be implemented later this year.

In Scotland, it’s already been introduced. Plans have now also been announced for a new law to ban lettings agents from charging fees to tenants in Wales.

Check your contact is an Assured Shorthold Tenancy (AST) Agreement

While there may be advantages and disadvantages to using a lettings agent, the key thing as a tenant is to ensure your contract is an AST agreement.

With this type of agreement, there is the legal requirement that your deposit must be safeguarded in one of the three Government-approved deposit protection schemes.

Beyond that, your choice between using a lettings agent – and bypassing the fees by finding a place to rent online or via another means – may boil down to personal choice. 

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