PropTech lettings company, Hello Neighbour, claims that landlords renting property through high street letting agents are ‘wasting’ up to £1bn a year paying unfair renewal fees, and wants to see such fees banned.
While renewal fees vary, Hello Neighbour claims that the average is approximately 8.5% (incl. VAT), which means landlords are handing over an additional £2,550 to letting agents for their current tenants to simply renew – “literally money for nothing,” said a company spokesperson.
“That is just for the second year,” the spokesperson added. “If a landlord is lucky enough to keep the tenant for a third year the cost just keeps adding up.”
EYE has asked Hello Neighbour to provide the source for this data.
But it is not just renewal fees that incur ‘unfair’ costs, according to Hello Neighbour. The company also claims that letting agents are increasingly encouraging 18-month or two-year tenancy agreements at the outset to provide long-term security for the landlord and to help the tenant to “beat the queue”, which means higher upfront fees.
Again, EYE has asked Hello Neighbour to provide the research to support this claim.
To combat these fees, Hello Neighbour has Friday launched its “Stop Renewal Fees” campaign to supposedly ‘educate the market and equip landlords with the questions they should be asking their agent so they understand what they are signing up to’
Hello Neighbour is encouraging landlords across the UK to sign up to the campaign here and pledge their support to stop renewal fees for good.
Phil Shelley, chairman of Hello Neighbour, said: “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.
“We are determined to put a stop to this and that’s why today we are launching our “Stop Renewals Fee” campaign to educate landlords and let them know there is a better way so we can change lettings for good.”
What absolute rubbish… ok maybe some London Agents charge as a percentage of rent but all Agents near me charge a flat £90 – £ 150…
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That’s cheap, I thought 2 weeks plus Vat was the norm.
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This is hilarious, 8.5% of the rent to renew?
The majority of agents charge a small admin renewal fee to cover costs and make a small profit. Like £100 – £200.
So what they are saying is these agents should provide the service for free. We all know that averages are just that. What if the tenant renews each year for 10 years, as some do – the agent should just do this for free because £100 – £200 is a rip off.
Or is it because they want to harvest data in their ‘campaign’?
I’d love to see how this free service looks when it’s ready too, please post it here
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Well agency is very profitable but obviously have overheads (including wage bill) normally 2/3rd of the total fees, but expecting a finders fee to cover life long redraw ast’s is a bit much.
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Maybe he should stop charging for what he does? We’re business’s not charities.
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They need to site the source of their data. I have absolutely no doubt at all that some agencies get away with this, and that’s down to their clients to make alternative arrangements or go to the TPO or other redress scheme over or move their property to someone who does not.
But this is certainly not common in the area I am in. Here its a flat fee of 100-150 pounds for all of us. As for ‘money for nothing’ they do realise that a fixed term agreement contents can change with new legislation, right? So the next agreement is unlikely to be exactly the same as the last agreement signed.
Also, if the RRB as it stands comes into force this will largely be irrelevant anyway….
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Biggest load of rubbish I’ve ever read
We charge £50!!
Also I’ve looked at their website. Proptech company my a**e. They use the same technology as most high stree agents
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Any fee to landlords is an outrage in my opinion!!
🙂
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