As MPs carry out an inquiry into the private rented sector, councils say “extortionate fees” charged by some letting agents are making it harder for people to find a home.
The Local Government Association (LGA) will raise the issue, alongside concerns about “rogue” landlords, at a meeting today of the communities and local government select committee, which is carrying out an inquiry into the private rented sector.
It says letting fees in some areas are so high that young people on low incomes may find it more difficult to rent a property.
Tony Newman, from the LGA, will be giving evidence to the select committee. He said: “With the housing market stagnant and a shortage of mortgages available to help first-time buyers, people are increasingly turning to the private rented sector to find a home.
“Now, more than ever, we need safeguards in place to help people find good rental properties and protect those who rent from bad landlords and rip-off letting agents.
“For many people looking to rent, especially the younger generation moving out from their family home, the up-front costs of a deposit and agency fees can be huge.
“We’ve heard stories of some letting agents charging hundreds of pounds just to carry out basic credit and reference checks. For people in the early stages of their career and on relatively low incomes, this can prove a stretch too far.”
Mr Newman said that while most private landlords provided a good service, “there are some bad landlords out there which give the rest of the sector a bad name by renting out shabby, substandard homes”.
He added: “We’ve seen examples of people being made to live in squalor in properties that are small and unsafe, crowded in with too many other tenants by landlords more concerned with their profits than the wellbeing of their tenants.”
The private rented sector is growing, as home ownership falls and waiting lists for social housing rise.
Last week, the housing charity Shelter said private rents had risen by £300 in 2011-12 across England, which was making it harder for people to buy a home of their own.
It said the sector was “no longer fit for purpose” and had outgrown its role as a provider of accommodation to students and young professionals.
Aimed at those deemed to be under-occupying their homes, the changes will lead to some people losing a proportion of their housing benefit.