An online lettings platform is attacking agents for their fees, which it describes as a “waste” of landlord funds.
Hello Neighbour, a platform that currently operates only in London and some other southern England areas, says of the over one million rental properties in the capital, an estimated 760,000 use traditional high street letting agents.
It claims that with the average tenant in London staying in their rental property for two years, landlords are currently paying renewal fees on 380,000 properties each year.
The platform then claims the average fee is approximately 8.5 per cent including VAT “meaning that for an average London rent of £2,500 a month, landlords are handing over an additional £2,550 to letting agents for their current tenants to simply renew - literally money for nothing.” And a statement from the platform then accuses the industry further by saying such a fee is just for the second year and comments: “If a landlord is lucky enough to keep the tenant for a third year the cost just keeps adding up.”
The platform is launching a Stop Renewal Fees campaign - which people can sign only if they supply contact details.
Phil Shelley, chairman of Hello Neighbour, says: “For too long, high street agents have taken advantage of landlords by charging fees for things that just aren’t fair - especially renewal fees. It’s crazy to think that landlords are handing over this kind of money every time their tenants simply choose to stay in their home for another year.
“Punishing landlords for having a great property that people want to remain in is just absurd. Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them. So in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.”
Hello Neighbour - founded in 2018 and currently operating in London, Brighton, Oxford, Guildford and Reading - says it is launching “a self-service offering” in January which will be available for the whole of the UK.
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Hello Neighbour says use us instead so we can rip you off.
"Hello Neighbour,” only charges a small fee of less than £150/annum for doing the AST-Agreement, similar to “Purple Bricks.” Annoyed Landlord.
I am wise to this practice and have one agent who doesn't charge and the second agent we just go on to a rolling tenancy. Absolutely agree this is a rip off charge and there is no need to pay!
Annoyed landlord, well said you can now consider changing your name to furious, more on-line I,T Companies promoting their own Business by attacking others, they tell us to embrace that.
Not all Agents Charge those kinds of fees. I know a good one in South Ealing that don’t charge renewal fees when same Tenants stay on just a reasonable administrative charge + vat, it’s not the Agents fault the Government puts vat on letting fees making Renting further unaffordable. Agent employ a lot of young people providing much needed jobs, travel and sometimes multiple viewing I applaud that, not some on-line out of date blown up pictures you’d think it was a different property.
Rolling on to a SPT should incur no fees, but a renewal will involve administration plus the issuing of a new How to Rent document if it has changed. As an aside, currently failure to issue this most important (sarcasm) document nullifies the ability to issue S21. What new sanction will be used when they eventually abolish S21?
I never use an agent; that is partly why I can keep my rents low.
I've managed to get the letting process down to a fine art (I think!).
I had over a hundred applicants for a short let flat I advertised recently. I showed it to only one person. I checked the person out online before he arrived for the viewing, and formulated the contract in the morning before he arrived to see the flat. Also emailing the prospective tenant all the documents which the Landlord has to supply before letting and requesting that the prospective tenant bring all the right to rent documents to the viewing.
He really wanted the flat, so after interviewing him, we signed the contract at the viewing and he transferred the money at the viewing and I handed over the keys. The let has worked out very well. The tenant is excellent, very helpful and very happy!
Obviously this accelerated letting process would not work for everyone, but it worked for me and my tenant.
Not having a void period after the flat is ready to let is another reason that I can keep the rents very low.
If any business wants to operate at below cost or for free, let them do so. If any customer is unhappy with their current provider, let them go elsewhere, but, when the choice has gone from the market, all will have to pay the appropriate cost for the work undertaken.
I am a landlord and also a letting agency owner in Surrey with nearly 40 years legal, mediation and management experience.
If I may, I would like to offer some balance on this topic.
A tenancy renewal covers:
1. A new fixed term agreement allows provision for an agreed notice provision from tenant by the tenant , eg; 2 or 3 months, and after a minimum contract term. This can help engender a tenant’s notice potential away from quieter times like Xmas and avoid void rental periods.
Alternatively a s13 notice.
2. Rent review negotiation with tenants, including providing comparable evidence that would be accepted at a rent tribunal.
3. Updating tenant right to rent compliance, via government share codes if required. If you don’t have these a landlord is legally obligated to advise the Home Office.
4. Updating all safety & How To Rent tenant compliance, and most importantly, audit trail tenant receipt evidence of such.
You will more likely (nowadays) than not, not get a possession order without all the above boxes ticked.
5. Finally your agent, if properly regulated, will have PI insurance, meaning you’re fully covered for the above.
If you have all this covered then that’s great. We are all by now aware though that the powers that be will try and trip you up - for example; there have been 2 new editions of the How To Rent Guide this year.
There will be a charge for the above by your agent, less than a trip to the dentist for a check up. Great value in my opinion, for peace of mind, if nothing else.
I appreciate you must have an experienced, qualified local agent you have a relationship with and trust; one that picks up the phone when you ring them!
I’m sure everyone on this forum is fully clued up on the above. That said, there are 1000’s, not as clued up as you, who won’t stay on top of it, and are sleepwalking into problems.
A good agent is worth their fees, many are not good though
Only one agent charges rent renewal on practically doing nothing. I have used him for just introduction. All the works is done by me, such as referencing providing all relevant documents including the latest "How to Rent guide". There are agents who will not want business from me unless I went for their over inflated fees of at least rent collect, so they can charge me for referencing, tenancy agreement etc. Then they agreed to introduction but wished to charge me for referencing, tenancy agreement as a whole one off fees of extra £480 on top of their fees of 9% plus VAT of the annual rent. This works out almost 2 months rent. I had to refuse them but still hassle me with persistent emails and letters, even after renting the property through another agent. Some of the agents do not live in the same world, and say they are the largest and have the most business. So how is that going to benefit me, I ask them. they have the audacity to say they would like the whole business in the area, which is impossible as they are the only agents. They have bought quite a few other independent agencies and have become large and operate in central London now as well, started around Kingston upon Thames. Not all LL need the full services provided by agents. Why would the LL's want someone else to do their tenancy agreement?
That sounds like the way LRG used to behave with me.
Don’t like it, go somewhere else.
@ Jason, I was never with LRG and never will be.
This should be an administration cost that the consumer/customer pays.
Ol yeah hold a minute didn’t the non Conservative party ban that practice aswell, another cost passed on to the landlord.
Letting agents should be looking at online portals and A.I technology and feel grateful for the income stream us landlords hard earned investments provide them with let alone adding skimmer costs aswell.
It wouldn’t take to much innovation for them to have a blockbuster video Woolworths style existential crisis.
Tenant's fee ban of 2019, won't permit that.
VERY happy with my local real world agent ( Strutt & Parker ) , all this virtual online stuff promises so much but in my experience delivers very little
All hype imo
I agree that agent renewal fees are a rip-off and should be banned.
The Tenant Fees Act 2019 has already banned them for tenants, these fees were implemented by the estate agents, but landlords had to pay back to the tenants 1 weeks rent.
This "BS," fee is unfair and unjustified, as the agent's work was done when they found the tenant and signed the contract.
If the tenant stays or leaves, it's because of the landlord's work, not the agent's. I don't pay renewal fees to any agents, and I advise other landlords to do the same. We should not be fleeced by agents who provide no value for money.
I use agents for a tenant find service only, you found them got paid. Contract concluded, I won’t pay again.
100% Leon
It’s totally wrong for Authorities to be allowing, encouraging and giving Tenants rights and financial support to interfere with Privately Owned Property.
Yes I had one of those know all Lead Tenants with he smart Technology who replaced the room stat with smart Technology system to his phone and in the process blew the printed Circuit on Virtually New Vaillant Boiler, cost me £200.00,
now he’s left and I am stuck with a system I can’t access, (more to this storey too) the house is now vacant and what does it matter if it stays that way, our authority has been under mined thanks to Mr Rogue Home Secretary.
Another house the Tenants again interfered without my knowledge or consent until I had reason to access loft for EPC Renewal, couldn’t believe what they had done, Roof Rafters Foam Spread, which is a big no no with Surveyor’s and Mortgage Companies who won’t lend on those, well done making a Sale virtually impossible or thousands knocked off the price.
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