Image: Peter Alan estate agents, who have been accused of demanding extortionate up front payments from prospective tenants.
Landlords and letting agencies in Cardiff are cashing in on the city’s housing crisis by demanding huge upfront payments from people who are unemployed or on low-wages.
Students and young people are being particularly badly hit, and being forced to pay huge amounts of money before they can even set foot in a property.
The tenants union ACORN Cardiff, who organise for renters rights, has blown the lid on the scandal.
They say that as the academic year draws to a close and Cardiff’s students and graduates begin looking for new places to live, they are faced with a private rental market that is spiralling out of control, with average rents across the city now at £849 per month for a two bedroom property, an 18% increase on 2019 prices.
But before young people and students can even access housing, they are being told they have to make huge upfront payments which are impossible to afford, leaving them either in debt or with nowhere to live.
The union says that some agencies and landlords are asking unemployed people or low earners for up to a year’s rent in advance, which in some cases can top £10,000
If prospective tenants can’t do this, then they have to supply a guarantor – a UK-based homeowner that also earns over a certain figure, who can pay rent should the tenant fail to.
This naturally discriminates against those whose parents don’t own property.
Ali is a 20 year-old international student living in Cardiff who’s tenancy is ending in September. He described how he and his friend were asked to pay around £6,000 upfront by one Cardiff letting agent.
“The agents, Peter Alan, said that if I didn’t have a job and thus an employer reference, I’d have to either provide a guarantor or pay 6 months upfront.”
Ali says that even though the other tenant was able to provide an employer reference, the letting agent insisted that both had to pay 6 months rent in advance.
He says that with the deposit, this would have amounted to around £3,200 each. But before anyone could move in, they both had to pay, leaving a bill of almost £6,500.
“We had no choice but to try to find some money by taking out some loans,” Ali explains.
ACORN say that guarantor requirements and demands for up-front cash are leaving Cardiff’s students unable to find anywhere to live.
Aidan, 25, a PHD student, said that such demands are commonplace: “I’ve been flat hunting recently and more than one place asked for six months’ rent upfront,” they said.
“Because I’m a PHD student, this wasn’t classed as employment – even though we’re paid a stipend [a type of wage].
“Other places wanted multiple months and a guarantor. I finally settled on three months’ upfront, a big deposit and a guarantor.”
Other students have described the way in which letting agents put onerous demands on prospective tenants.
Shelly, 25, said that JNR Properties asked for a copy of the deeds to her dad’s house.
“They were really dismissive when my dad asked them to sign the guarantor agreement – There was space for them to sign and they hadn’t bothered.”
“All the dates were incorrect on the guarantor form and they took forever to change them, which made my dad uncomfortable because obviously it’s a legally-binding document that could lead to my dad losing his house if I failed to pay rent.”
In the end, Shelly walked away because she was worried about the potential impact on her family, meaning she lost her holding fee.
“I’m one of the lucky ones, because my dad does actually own his own home. but for so many people that’s not the case.”
“For me it feels really infantilising – I’m a twenty-five year-old woman with a permanent job and a good salary, and my dad works at a supermarket on zero-hours.
“It’s not fair that landlords expect this.”
The extent of the housing crisis in Wales was made clear recently when the charity Shelter revealed the shockingly high number of people living in damp or mouldy homes.
Yesterday in Wales, Welsh Government ended the eviction ban which has been in place since the beginning of the pandemic. This now means that landlords can evict people who have fallen behind on rent arrears, or for any reason they like.
Housing organisations have warned that the move will see a surge in homelessness among those who have fallen further into poverty in the pandemic. Jennie Bibbings, from Shelter Cymru, said that banning evictions “saved lives”.
Data released by the Bevan Foundation this week found that the pandemic has seen living costs rise and incomes fall, and suggests that one in ten Welsh households live in insecure housing.
ACORN did claim a victory yesterday when Welsh Government scrapped the Tenant Saver Loan Scheme and replaced it with a grant scheme for renters who are in arrears, but the union criticised the fact that the new grants won’t be available to anyone who receives Universal Credit or equivalent benefits.
