And the average fee charged to secure a rental property is £220, according to new research by Rentify, an online service for tenants and landlords.
It highlights the extreme and opaque nature of letting agent charges and fees. It found that nearly 25% of the London letting agents surveyed charge over £300 in administration fees, with the most expensive agent charging £600 in East Ham.
Indeed, the most expensive letting agents were all found in London. Bristol was the only city ‘As if it wasn’t bad enough that letting agents charge these unnecessary administration fees to tenants, some of these charges are also passed onto the landlord so the agent makes double the profit. These fees lack transparency and are simply unfair,’ said George Spencer, chief executive officer of Rentify.
‘Sometimes they cause tenants to pull out of properties because they have not been disclosed upfront, or budgeted for,’ he added, and pointed out that the Advertising Standards Authority has ruled that from next month these costs must be clearly displayed in adverts alongside rental prices.
But there is no onus on agents to make their charges fairer, or better still, remove these unnecessary fees completely. ‘These figures are especially interesting in the light of Communities Secretary Eric Pickles’ recent promise to cut down on rogue agents through compulsory redress schemes. Perhaps Mr Pickles could have gone further by seeking to introduce new regulations, such as a qualification scheme for agents. At the very least, Rentify’s research lends strong support to the view that urgent action is required,’ added Spencer.
Overall the research found that letting agent administration fees varied significantly across different agents and areas, with some not charging any additional fees. Those that do charge them, on top of the standard deposit and one month’s rent in advance, say they do so for drafting tenancy agreements and conducting reference and credit checks.
Typically, the time spent doing this work is 90 minutes, which means the letting agent is charging the tenant £146 per hour to complete these tasks.
The survey also found that the average fee for a credit check was £50, a task that costs letting agents less than 20 pence if bought wholesale which is usual practice for larger agents.
‘Rentify is committed to saving landlords and tenants money. Our research exposes the need for greater transparency in the rental market. We charge a flat £15 fee for a thorough credit check with no other hidden extras so it can be done,’ explained Spencer.
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