Research among over 400 agents has shown the astonishing variation in fees across England – ranging from around £72 to £1,198.
In London, where additional, separate research was carried out, the range is £60 to £810.
The research was carried out by online agent Urban and involved letting agents in 150 towns plus London.
It found that on average, the five most expensive areas for tenant fees are:
- Basingstoke £621.67
- Slough £543.33
- Cirencester £535.00
- Reading £530.62
- Alwick £530.31
In contrast, the five cheapest areas on average for tenant fees are:
- Habrough £136.67
- Worksop £139.00
- Market Harborough £153.00
- Leeds £162.98
- Newham £164.00
These costs were based on:
- Set-up costs to prepare a tenancy agreement
- Contract fees
- Referencing for two people
- Guarantor fees
- The overall cost for an unmarried couple to move into an average rental property
Priciest individual agencies
Of the most expensive agencies, four out of the five are in or very close to the Thames Valley:
- Slough £1,198
- Basingstoke £1,100
- Cirencester £950
- Didcot £756
- Reading £723
The cheapest individual agencies are based in the following locations:
- Worksop £72
- Cleethorpes £95
- Newquay £100
- Harbrough £105
- Lowestoft £110
Research by Urban in London showed a similarly wide range of fees from £60 to £810.
On average, the ten most expensive areas in London for tenant fees are:
- Leytonstone £560
- Plaistow £558
- Bow £550
- Lewisham £533
- Chingford £481
- Royal Docks £471.50
- Streatham £450
- Canary Wharf £450
- Notting Hill £440
- South Lambeth £420
In contrast, the ten cheapest areas on average for tenant fees are:
- St Johns Hill £60
- Greenwich £120
- Clapton £150
- West Wimbledon £150
- East Finchley £156
- Hammersmith £165
- Finchley £170
- Hendon £192
- Winchmore Hill £201
- Wandsworth £216
The booming East End market dominates the pricey end of the list, with 50% of the top ten most expensive areas for average tenants’ fees located in this part of the capital.
Surprisingly, many of London’s most popular residential areas such as West Wimbledon, Finchley and commuter-friendly Clapham boast some of the most reasonable tenants’ fees as charged by individual letting agencies.
Priciest individual letting agencies
Breaking the research down to individual letting agency costs, the most expensive agencies are based in the following areas:
- Plaistow £810
- Lewisham £750
- Woolwich £680
- Chiswick £588
- Leytonstone £570
- Shepherds Bush £550
- Notting Hill £550
- Lewisham £550
- Fulham £550
- Ealing £550
Some of the cheapest individual letting agencies are based in the following locations:
- St Johns Hill £60
- Greenwich £120
- Chiswick £120
- West Central £144
- Clapton £150
- West Wimbledon £150
- Finchley £150
- Southgate £150
- Woolwich £150
- East Finchley £156
Interestingly, despite the area of Chiswick and Woolwich having some of the cheapest individual letting agency costs, agents in these locations also charge among the highest fees. This highlights the huge disparity of cost even within local areas.
Costly bolt-ons
The research also found a variety of additional charges. Examples include:
- Photocopying. At one agency customers can be charged £5 for a copy of the tenancy agreement.
- Copy of tenancy agreements. If multiple tenants require more than one copy of an original tenancy agreement from one agency, the duplicates will cost £25 a copy.
- A weekend move. Moving in on a Saturday will cost an additional £90 by one letting chain.
- Speeding moving. Moving quickly could incur an additional fee of £144 from one agency.
- A key to the front door. One agency charges an additional £7.50.
Perhaps most surprising is the fact that personal circumstances can also influence tenant agency fees. For instance:
- At one agency, getting married or divorced and changing a surname on a tenancy agreement costs £200.
- If a tenant is cohabiting but not married, some agencies in certain areas will charge an additional one-off fee of £40.
- Many agencies across the UK charge extra if a couple have only been living together for nine months or less when embarking on a joint tenancy.
Urban founder Adam Male said: “Many high street agents do not fully reveal all of the fees that tenants may have to pay.”
So there you have it – the home counties straw that broke the camels back.
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No tenant should be paying more than £30/£40 to move into a new home…..anything above that and the agent is trying to fleece the tenant because they haven’t got the balls to make the client pay the fees. The landlord is your client people….. and strangely enough it’s not unusual to charge your client. A tenant should pay for referencing, but that’s about it. Two people, two lots of referencing. The rest should lie fully with the landlord.
Any legislation banning tenant fees is well overdue. Time to grow some big ones all you letting agents out there and start charging the person who should be charged…..your client. As a reminder, that’s the one who’s paying you to do a job for them.
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FromTheHip64
have you ever run a letting agency?
The client won’t pay any more than they want to otherwise they’d go to a bucket shop agent that won’t charge the fee to them and doesn’t know the deregulation bill from their left leg. In turn the very person we are trying to protect “the tenant” moves into a property not fit for purpose and service goes out the window because the landlord chose not to use an expert due to fee and has not been advised of their statutory obligations.
do you know what the following costs actually are?
advertising on Rightmove and major portals
inventory and schedule of condition
software
utilities
car costs
ink
paper
Monthly service engineer for the printer/photocopier
insurances
legal costs
property management
rent on commercial premises
staff training
investors in people
tenancy progression
referencing agent
Window displays
£30/£40 to a tenant and £400 does t quite cut the mustard does it.
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Please tell what is involved in referencing?
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So in summary FromTheHip64 it’s because of people with a lack of knowledge and poor opinion that have started the cataclysmic snowball of banning fees which will ruin the private rented sector!
I feel for tenants I really do because the bigger picture is far more serious for them in the long run.
if you’d like me to send you a spider diagram of all the negatives to come out of banning fees then I’m happy to help you understand.
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Some of the fees quoted above are excessive but there is no reason for totally banning Agents fees to tenants.
None of the tenants I have spoken to object to paying fees, they just object, quite rightly, to paying excessive fees.
Fees should be fair and reflect work done on behalf of and for the benefit of the tenant.
My opinion is you are wrong about referencing – this is not for the benefit of the tenant and should not be charged to them.
I believe there should be one fee, capped at say £50 or £60 plus vat, as a tenant’s contribution towards the costs of the tenancy agreement. That is the only document that benefits the tenant.
The agent must also be able to charge tenants for breach of contract – but again these fees could be legislated for as a set fee.
Any tenant who was charged illegally could sue the agent for the amount charged plus 10 times that amount as compensation – self policing therefore.
Finally this should be to ANY person letting a property – not just agents. I know Landlords who charge up to £150 to tenants.
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Sorry wrong thread – Fromthehip is wrong about referencing, not you!
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A very factual list there Votta583. All of which should be factored into the clients fee. Funnily enough, recruitment agencies have almost identical outgoings. Guess who pays nothing and who pays the fee?
I’ve been fascinated ready all the article on here over the last few days and it really is laughable seeing countless people from the lettings industry trying to justify charging the wrong person. Yes we know about overheads and the cost of ink and petrol and photocopying but don’t come up with ludicrous charges to lump on the tenant to pay for them. It actually looks quite desperate in some cases.
Look…..a landlord comes to you and says “find me a good tenant”. So you the letting agent take details and advertise the property. You have to do that to find tenant, unless you have one in mind in which case you’ve saved some time and money. The landlord wants his house left as it was found when the tenants move out. Inventory. He wants it, he should pay for it. He wants good tenant (of course) so any referencing he’ll need to pay for. He wants a tenancy agreement (obviously) so he’ll need to pay for that too. Tenancy renewal….he’ll need to dip into his pocket again. Basically if the landlord wants it (or needs it) he should stump up. End of.
And yes I have been involved in letting. I’ve been a sales branch manager for 20 years and as a senior manager with LSL I had a letting department within my office. £120 for a tenancy renewal??? £300 tenancy set up, £120 for a guarantor….the list goes on. Nice income, but paid for by the wrong person. Just because the client doesn’t like the idea of paying you the whole fee to do a job doesn’t mean you should pass the cost on to the tenant. It’s a rip off and the only people who can’t see it are the blinkered letting agents……who just happen to be earning out of it.
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This is still not enough of a reason for ALL fees to tenants to be banned.
I get equally as annoyed by the commentators saying it is right that a tenant should pay nothing as I have been doing with the agents who have tried defending the ludicrous fees they have been charging.
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FromTheHip64, you should have no difficulty then in answering my question above, what is involved in referencing?
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FromTheHip64
Would you like to see my PNL’s? And I’ll show you what it actually costs to run a lettings business.
Also the fact you been a SALES branch manager means that your lettings comments aren’t really worth taking seriously.
Try running a lettings business for an independent for several years and keeping up with legislative requirements and we’all revist this
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The law states tenant fees should be displayed on website and in office – Can you find this on https://www.urban.co.uk ?
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The law states many things but it’s not policed enough
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What planet is TheHip64 from?
Economics can be simple if left alone – the more you meddle, the more it backfires. So take these scenarios:
1- What’s to stop tenants to applying for 10 houses at once if they are not paying the bill??? In future we will have to think ‘do I want to invest £50 of my own money for references in these two people?’..out of principle why should we. What other industry can an individual walk into a shop as insist that the shop spends money on them??? seriously what a joke.
2- What if an existing tenant wants to add another? If they are banned by law for paying for a reference who will? the agent? the landlord? err no – they will be told ‘sorry get lost as neither the agent or landlord will donate to your lifestyle thanks’.
3- Whoever thinks that the revenue flow will not be: Fees onto landlord, landlord on to rent is mad. Whilst some will argue that the market value is the market value; well this will soon get altered by BTL investors withdrawing from the market and landlord resistance.
4- What about mortgage application fees! are the next? communism en-route….
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I’m from the planet unbiased. Try visiting.
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Unbiased is one thing, but common sense is another. Take my points and feel free to answer them in the context of your comment and you will soon see you clearly lack enough letting experience (by your own admission) to bother commenting. Please do answer my points for all of our benefits..we might all learn something.
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I can answer your points:-
1. Supply and demand. At the moment I have on average 10 people chasing any property that comes available to let – they are not going to risk losing a property by going after 9 others, and if they do I have plenty of other people who want to take the property.
If it’s the cost that bothers you, go back to in house referencing. The cost of the credit reference is only £10.50 plus vat, the work and previous Landlord’s reference you can apply for and costs time. This is what the Landlord pays for – our time and experience.
2. If the tenant wants to add another tenant let them. It is a one off reference, and can be treated as the scenario above. If you want to charge the Landlord get their instruction first – if the Landlord refuses to pay you advise the tenant he has said no if you want – a simple commercial decision.
3. The required rent increase to make up for lost fees is not that large and will level out once the market settles. The average being quoted is £15 or £20 a month – I have not sat down and worked out the figures but I doubt it is even this much for some Landlords. Supply and demand will still be the main factor whether rents can increase or not.
To be perfectly frank – if a Landlord can’t afford the extra fee burden then they shouldn’t be renting in the first place.
4. Nothing at all to do with Lettings fees.
The reason to agree in principal to the fees being banned, or my preference would be capped, is that it will give a level playing field. I am tired of letting agents being able to reduce their fees to Landlords because they make their profit from the tenant, that is not how it should work.
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In your model…
1) Basically, trust the tenants not to mess about and they will. They may not in your area but half the tenants that want to apply for some of our houses will just apply for any house an hope they get one. As for the fees, we pay a lot more that £10 per reference and pay for a company to do a proper assessment not just a credit check. I’m happy that these companies do their job well and are very efficient at what they do. It woud not be efficient for us to conduct all of those checks without the landlord getting a heft bill. If there were then any tenant messing about then you’d be repeating it over and over for the same house.
The bottom line there must be some form of commitment from the tenants to the property on day one, else the same lack of commitment will be shown to them. So if a better tenant comes along, no pets, better job, lower risk etc then we owe the tenant nothing, no obligation at all so will jump ship to the better tenant. This will favor the better off as usual and does nothing to help the lower paid, higher risk.
2) Of course the landlords will say no – what is the difference between the landlord paying us or giving a donation to the tenant – how utterly ridiculous. How many landlords do you have that are in it for the charity ! Zero
3) The BEP on a £25 a month increase is about 12 months, so a tenancy longer than that and the tennat is worse off. In addition, it amazes me that nobody has reminded everyone that £100 of a £500 agents fee is VAT! and then there is corporation tax….
4) Well that was obvious but the point is the chancellor was trying to help housing when in fact there are many other big ‘rip offs’ like £1200 arrangement fees for a valuer that gets paid a fixed fee of £90!
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I do know the letting industry and have been directly responsible for a letting department.
All I can say is that a tenant should not have to pay more than £100 for credit checks, tenancy agreement etc. There is no possible justification for more. If your business is going to struggle without over-inflating the costs to tenants then once again, you need to pass this cost to your client…..the landlord…..or take a serious look at the way you do business.
If another tenant want to join the agreement then yes, charge then £100 too. But when you hear of agents (lots of them) charging tenants £100 just to renew an agreement that’s a disgrace…. blatant overcharging.
It’s laughable that in all the comments and arguments against the ban you lot just cannot see how wrong it is to charge a couple circa £450 to sign up tenants for a 6 month tenancy agreement. I’m sure you’re all lovely guys and girls but you’re blinkered and biased, which is only to be expected as you earn your living in the letting business.
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It’s laughable that in all the comments and arguments against the ban you lot just cannot see how wrong it is to charge a couple circa £450 to sign up tenants for a 6 month tenancy agreement. I’m sure you’re all lovely guys and girls but you’re blinkered and biased, which is only to be expected as you earn your living in the letting business.
But that is exactly what you were doing with LSL? Reference fee for a couple @ £350 for the main applicant and £150 for the partner and that was before you added on the rest!
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I normally find when people say they know what they are talking about and then asked a simple question, their lack of response usually indicates they are questionable at being who they say they are.
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I currently work as an agent, but have also rented so seen things from both sides of the coin. The problem is not fees but the excessive level some agents think to charge. I’ve worked in big cities and small ones where prices are quite different. I learnt my trade at fees of half months rent plus vat, a far cry from the £110 we currently charge a single tenant. What I don’t agree with is the bolt on costs where frankly agents take the mickey and that in my opinion is what gives tenants the hump. The best way to argue to a prospective tenant as to why they should pay a fee is this…
What happens when a landlord lets directly to a tenant and the relationship turns sour? the landlord isn’t regulated, does what they wish and often tenants who do not know their rights bend over and take it. Our agency pitches that we are there to act as a middle man and a peacemaker to keep the reigns on a landlord and advise on the legal and fair way to deal with things ultimately protecting the interests of a tenant. That is what they pay their money for, not a few sheets of paper!
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Our agency pitches that we are there to act as a middle man and a peacemaker to keep the reigns on a landlord and advise on the legal and fair way to deal with things ultimately protecting the interests of a tenant. That is what they pay their money for, not a few sheets of paper!
Well said Toddy. This is exactly what the detractors don’t seem to get – that there is incredible value to a tenant in having a professional agent set up and manage their tenancy. I’ve lost count of the amount of times I’ve had to advise a landlord that its not ok just to barge in to a property as and when he feels like it!
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The same comments keep circulating around and around, everyone agrees that some charges by a minority are not fair, but some are. Looking at these stats does make you wonder how tenants throughout the UK are being ripped off by everyone and need for the Government ban.
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Urban founder Adam Male said: “Many high street agents do not fully reveal all of the fees that tenants may have to pay.”
Is this to mean that the figures listed aren’t necessarily accurate because not all agents are listing all fees? Or is this just an observation come from having done the research?
Would be interesting to compare these to the landlord fees in the same areas/from the same agents.
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Last month my lettings business costs were £20,050
the profit was after everything was £1,245
take away tenant fees From an agent who’s running a 9.7 out of 10 star rating on trustpilot means we go under and the industry has one less professional regulated agent.
or shall we just all become online agents that don’t know the law from their left ******** and be responsible for negligible tenant deaths and huge rises in court cases!
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9.7 out of 10 on a site full of fake reviews? dream on Votta https://www.theguardian.com/money/2013/jan/26/fake-reviews-plague-consumer-websites
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