The Middle Class Revenge: Stealing from the Poor and Robbing from the Rich

I am in the midst of moving out of my current home. It's a shared house with 8 roommates, 2 bathrooms and no working oven! I want to move into a more reasonable 1-2 bed flat/house that I will only be sharing it with my partner. Now, we have all experienced the renting struggle before. It is like play the lottery, trying to find the right size home, in a good area, for the right price. You might get one winning number on your ticket, but you can rarely get them all right.

I don’t think my home wish list is unreasonable, it needs to be within 10-15 minutes (by bike) from my work, for less than a £1000/$1,250 a month in a decent area. My standards aren’t too high, right now I live in a mold infested student house, so pretty much anything is a step up. I’ve come across several homes or apartments that I like, and are in my price range. So, I’ll get excited until I google search the estate agency.

An estate agency in the UK is similar to a real estate agent in the USA. They manage the houses for the owners, deal with contracts, references, collecting rent, and fixing any broken things within the property. However, a UK estate agent and a USA real estate agent differ in one major way. In America, when it comes to renting, you need to be able to afford to pay 1 month’s rent + 1 month’s rent as a deposit up front. That amount by itself can be a lot of money, especially if you live paycheck to paycheck the way I tend to.  I liked a maisonette (it is basically an apartment but there are only two floors) that cost £470/$500 per month. If I was in America, I would have to pay the £470/$500 as a deposit and an additional £470/$500 at the same time to cover the first month’s rent. That is £940/$990. More than one of my monthly paychecks. That cost alone is high, but that is the amount I would pay if I were renting in the USA. In the UK, estate agents operate differently.

In the UK, estate agency’s are robbing renters and landlords blind. They are getting away with charging extra fee’s to the renter as well as charging the landlord a percentage of their rent income and various fees for managing the property. It is insane (and immoral if you ask me). The same maisonette I mentioned before, it could cost me £940/$990 in the USA. After I viewed the property, the UK estate agent gave me a break down of all the money I would have to pay.

image from pixabay.com

£470 first month rent+ £470 deposit + £250 reservation fee (that would contribute towards my deposit if I was actually approved to live there) + £350 referencing fee for myself and my partner+ £100 contract fee (just to sign a piece of paper)= £1300 to move into a poorly cared for maisonette.

 Most of that money would be going not to the owner of the property, but the estate agent! The cherry on top of all these fee’s is that, to be allowed to move out of the property, I would have to pay the estate agent an additional £120 (even if I left the place clean and with no damage)!

In theory, I can afford these fee’s using a substantial amount of my partners savings and one entire month’s paycheck. But, why should I? These agencies are literally stealing money from people who probably cannot afford it. There is a reason that so many people are on a waiting list to council housing (it is like section 8 but more widely available). Who can afford to pay £1300 just to move into a place? That specific maisonette was not furnished, and had no refrigerator or washer. To live there anyone would probably have to add an additional £500 in furniture and moving expenses. Very few people can pay that amount up front. (It is crucial that I point out that the £470 per month maisonette is one of the cheapest options I have seen on the market) Most people barely save anything month to month, so how could they ever afford to save enough to move.

Where does that leave people? Either they must take a loan out just to move into a new property (that will cost them in interest later on), borrow money from family (embarrassing), apply to live in a council house (that is paid for by the state but has a long waiting list), suffer in an inadequate home, literally become homeless, or risk it with a private landlord.

image taken from pixabay.com

 Private renting is common in the USA. My parents rent out two of our properties, both privately. Their renters have never been concerned about being cheated by their landlord, in the USA the landlord is more concerned about being cheated by the tenant. In the UK however, private renting is much rarer and therefore riskier. I’m open to the idea because I am American and because I can’t in good conscious pay the fees to estate agents who do nothing but paperwork. But it comes with the chance of having my deposit stolen, or getting a contract that is less secure for me.

Overall, the renting situation in the UK is horrific. Sadly, because there is a housing shortage, most people will never be able to escape the renting cycle because they can’t afford a home, or there are none available to purchase. Therefore, estate agents get away with basically stealing from people, they understand that a majority of the population have no choice but to find a way to pay their incredible fees. And a majority of landlords don’t have the skills to personally manage their properties, so they have to pay the estate agent as well.

I usually think that the way the UK system is designed is better than America (for example healthcare and unemployment support). However, the way that renting is operated in the UK is immoral and evil. It allows the middle-class estate agents to feed off the lower class/poor renters and the upper-class landlords. This is one exception to my belief that Britain operates better. When it comes to the housing market and renting, the USA beats UK completely.