London Property Agent Accused of Breaking the Law by Charging Deposit Just to Make an Offer

A major London property agent faces accusations it has broken the law, after a renter alleged they were asked to pay hundreds of pounds in a deposit just to make an offer on a rental flat.

Landlords and agents are banned from taking more than one holding deposit for the same property at any one time, under the Tenant Fees Act 2019 – which turned four last week.

An initial violation of this ban incurs a financial penalty of up to £5,000. For any subsequent breaches, the fine escalates to £30,000 or could lead to prosecution. But the demand to “show willing” before being in with a shot comes amid few signs of the capital’s housing crisis getting better.

A third of Londoners live in the private rented sector, and they now face average monthly rents of £2,500. Demand for rooms and rental properties is so high that there have been reports of “bidding wars” with listed rental costs offering merely the lowest acceptable price.

Alfie, a civil servant aged 30, told Byline Times: “I was desperately in need of a new place after my landlady suddenly decided to evict us at the last minute. Being asked to pay to make an offer felt odd, but I felt pressured to do so while risking homelessness, as so few adverts were responding to me. 

“I actually went overdrawn making the payment. The housing market feels so f***ed, the whole thing has 1788 France vibes.”

The Property Ombudsman Service (TPOS) code of practice also mandates that only one holding deposit should be accepted for the same property, unless it is split up as small amounts among a number of tenants.

These allegations against Crouch End-based David Astburys, if found to be true, would indicate a breach of both the Tenant Fees Act 2019 and the TPOS code of conduct, according to Generation Rent. 

An email to the prospective tenant, seen by Byline Times, stated: “Please make the transfer of 1 weeks rent (£265) to the following account to make a formal offer: Once this payment is made please ensure you notify your negotiator immediately and send proof of payment. Once we have this payment, we will speak to the landlord in detail. If your offer is agreed the holding deposit is deducted from the final balance. If the landlord rejects your offer, you can either negotiate or have the full deposit back.”

Byline Times reached out to David Astburys and asked the firm to explain the email and whether the practices it suggests were common-place – or if this was a one-off, erroneous communication. Despite repeated requests, David Astburys did not reply to us.

Another London renter, who wished to remain anonymous, was asked to make a holding deposit before even viewing a property with another agent, as a “show of good faith”. She was also asked for a video of her, raising risks of discrimination. 

“I also found an inordinate number of properties where [I] was asked to “bid” for the rent.”

She added: “I was told the bidding works by a prospective tenant viewing the property, then “submitting” their maximum monthly rent. (So essentially a sealed bid system) These are compared, and the top bid wins.  It’s inherently prejudiced against single-income households. No consideration is given to the cost of living crisis and the cost of running said property.

“There were also some really messed up “lotteries” for viewings – property advertised, but when you contact the agent [you are] told to call again at (say) 09:15 on Saturday morning for ‘a chance to get a viewing slot’”.

“I lived in a pokey little one bedroom flat in the East End, where the landlord had tried to increase the rent some 30% the prior year, (settled on 20%) and then evicted me on the premise of selling the property but I never saw it advertised and suspected it was re-let at a higher price once I left.”

The complainant in this separate case was on a good wage: “I’m a professional working in the City, and was looking at properties up to £1,400 a month plus bills on top.”

It comes as the London rental market continues to run hot, with dozens of renters chasing each property.

Trading Standards in Haringey, where David Astburys is based, said it was investigating the matter. Byline Times has sought clarification from TPOS about whether it plans to investigate. All agents must be members of one of two official complaints bodies. 

Dan Wilson Craw, Acting Director, Generation Rent, said: “When the fees ban came in, landlords and letting agents were allowed to charge a holding deposit to cover their costs if the tenant didn’t take reasonable steps to enter the tenancy. 

“But the rules around holding deposits are fairly strict and renters are entitled to get their money back if there is a problem that isn’t their fault.”

Wilson Craw added: “If renters are encouraged to enter a bidding war the agent might be breaking the law if they have taken a holding deposit from someone else. Trading Standards officers at local councils have powers to take action against agents and landlords that do this.”

Cllr Sarah Williams, Cabinet Member for Housing Services, Private Renters and Planning, at Haringey Council, said: “With over 40% of the borough renting from a private landlord, we want to ensure they are managing properties responsibly. Landlords who fail to obey their legal obligations face the prospect of enforcement action.

“Our Trading Standards team will investigate this matter immediately, raise any concerns with the agent, and take the appropriate action.”

The London Renters Union said it had heard several cases of Londoners being asked to provide videos, CVs and enter bidding wars to get rental accommodation.