"Rip-off" letting agents are fuelling the housing crisis by hitting tenants with extortionate fees, local government leaders warned yesterday.
Some agencies in England and Wales are charging non-refundable administration costs in excess of £500 and in some areas high letting fees are acting as a barrier to people trying to find a home.
The Local Government Authority (LGA) is calling for more powers to protect tenants from unscrupulous agents, as well as rogue landlords, as more people are forced to turn to the private rented sector.
Some local authorities have set up their own letting agencies to ensure tenants get a fair deal, it said.
Councillor Tony Newman, from the LGA's environment and housing board, 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."
The LGA pointed to housing survey research that found more than 3.6 million private rented households were recorded in England last year, up more than one million in six years.
Housing Minister Mark Prisk said: "People living in private rented homes should be treated fairly and honestly, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants.
"That's why we have strongly backed industry-led schemes such as SafeAgent, which allows landlords and tenants to identify trusted agents and to vote with their feet."