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Original Source: Property Eye
Original Author: Rosalind Renshaw
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Agents have come under new fire from Which? for charging multiple ‘holding’ deposits from prospective tenants after one of its members of staff twice handed over £500 to an agent – and found he was not the only one to do so.
Adam French, 28-year-old senior content editor, said he had been looking for a flat for months, “squeezing myself into shoebox flats with 15 other prospective tenants and one grinning, swaggering letting agent”.
(You can see where this is going, but in all fairness, this really is not the best PR for the industry.)
He and his girlfriend finally found an acceptable flat and made an offer.
“And then something altogether unexpected happened. The letting agent told us that to put our offer to the landlord and take the flat off the market he’d have to take £500 off us as a ‘holding deposit’.
“This was the first nice flat we’d seen in weeks. We were worn down by months of flat hunting, and out of sheer desperation – and against our better judgment – we agreed and transferred the cash, which we understood was supposed to hold the property off the market for us until checks had been made.”
The next morning, however, French was told that two other prospective tenants had also put down a £500 holding deposit – “a fact he [the letting agent] must have known before we put our money down. We had paid a holding deposit that didn’t do what it said on the tin – it didn’t ‘hold’ the property for us at all.”
French said the agent then tried to play the parties off each other, in a bid to increase the rent offers, all the while holding £500 from each.
French said: “At this point we walked away and demanded our deposit back. A return that inexplicably took five full working days to come back into our account. All the while meaning that we couldn’t move forward with any other flats we saw, as we needed that money.
“I wish I could say this only happened once, but it happened TWICE, and with different letting agents.”
On a third occasion, French and his girlfriend refused even to participate.
Which? has now produced an advice guide and template letter for renters in a similar situation, and says it is now looking at what should be done in the long term over what it calls “sharp practice”.
Alex Neill, managing director of home products and services for Which?, said: “Navigating the London rental market is both stressful and expensive. For letting agents to be adding to that pressure by taking financial advantage of prospective tenants is totally unacceptable.”
Mark Hayward, chief executive of NAEA Propertymark, said: “Taking a multiple deposit is bad practice and just shouldn’t be done.”
Last week, the Government said that holding deposits would be capped to the equivalent of a week’s rent, with other deposits capped to a month’s rent.
However, Kate Webb, head of policy and research at Shelter, said: “It’s positive to see the ban on letting fees confirmed in the Queen’s Speech, along with a new commitment to cap deposits.
“However, action also needs to be taken to ensure holding deposits are only equivalent to three days’ rent and are not taken out by agents for multiple tenants.”
