A leading agent has hit out at firms that give the industry a bad name by charging “ridiculous” fees.
Richard Davies, head of residential at Chestertons, said that his own firm does not mark-up contractors’ own invoices, and nor does it take commission from contractors.
He said: “The only time we would charge landlords anything is when the work is for over £600, in which case we charge a 10% supervision fee.
“We think we may be unusual in not charging our contractors, as one told us the other day that we were the only firm that he did not have to pay anything to.
“My view is that we are not here to rip our landlords off but to provide them with a service, and I regard getting contractors in to carry out maintenance or repairs on their properties part of the service they are already paying for.
“Many of our contractors have worked for us for years, but all are fully referenced and have the right insurances. All work is inspected and if we’re not happy with it, we won’t use that contractor again.”
Chestertons’ main charge to tenants is £222 including VAT for the agreement.
He said he knows of other firms charging substantially more.
Davies, who was originally an engineer working in the oil industry before becoming an agent, is now in his 20th year with Chestertons, having joined as a negotiator and worked his way up.
He said that although there have been many changes in the business – not least when it entered receivership in 2005, and then merged with Humberts for a while – but that the company’s ethos has not changed.
He describes this as the “ethos of delivering a high level of service and developing long-term client relationships”.
He firmly believes that both letting and sales agents should be licensed and have minimum qualifications before being allowed to practise.
His own firm pays for staff to have ARLA training and for their ARLA subscriptions. There is also annual top-up training, generally delivered by Chestertons’ own training department.
In charge of both sales and lettings – as well as overseas – Davies says that the London sales market is “tough at the moment” with low demand largely triggered by hikes in Stamp Duty for pricier properties.
“There is a gap between vendor and buyer expectations. Immediately after the election, there were even reports of sellers putting prices up!
“There are certainly not as many transactions as there were a few years ago, but we are now starting to see some improvement.
“The industry will have a much better second six months this year than the first six months.”
By contrast, lettings has been consistently busy, although he – like many in the industry – worries about affordability for some tenants, including young professionals.
“We charge a deposit equivalent to six weeks’ rent and always have done, so that hasn’t changed. The issue is therefore one of high rents and the effect on deposits.”
Chestertons’ fees are here
“The only time we would charge landlords anything is when the work is for over £600, in which case we charge a 10% supervision fee”
Is it me?
Is that £600 including VAT? What is the incentive to get a competitive quote? Chestertons is a good firm, but I am not sure this policy qualifies them to judge others over what is or isn’t a rip off. Surely, if you are paid to manage a property that’s reward enough.
I don’t feel landlords should have to pay more when something major goes wrong anymore than a trouble free let merits some sort of refund as the agent has done nothing. Just a thought.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I understand it is widely accepted that if a letting agent is ‘supervising’ larger works then to charge a fee is acceptable. Otherwise, what’s stopping a landlord requesting their agent oversee a complete refurbishment between tenancies, complete free of charge?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Very valid point. I’ve overseen quite a number of refurbs, costing typically between £10k and £30k. My clients have had excellent work at very reasonable rates, but the overall workload for me has been substantial. So, on occasion, I’ve negotiated with the client a fixed fee for the project, generally around 5% to 8%.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
According to their website, it’s works over £500, not £600.
There are quite a few other charges they have which I was shocked to learn. £60 minimum for copy statements and £60 to arrange an EPC are two examples. Looking at all of their charges, I seem to be selling my services way too cheap!
But, importantly, they are displaying their fees transparently, which is more than many are doing. Their potential customers can make an informed choice.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
no wonder the industry has such as bad press
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Hmmm, ‘his own firm does not mark-up contractors’ own invoices, and nor does it take commission from contractors’ – but they do charge a ‘supervision fee’?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Roz can we please not keep having these cheap advertising attempts by various agents. I am sick of hearing how whoever takes the opportunity to successfully have some editorial/advertisement placed on here about other agents’ fees, that they are the only ones playing fair with their clients. They are not. Many agents play fair. I have found from my experience it is the corporates and the wriggly watch, white socked 5 minute wonder brigade who overcharge for anything and everything. I have run my own agency for 33 years and never topped up invoices to landlords, never taken a kick back from the contractor. Also, as already pointed out, where is the incentive to get the job done for the right price if they charge ‘a supervision fee’ for ‘anything over £600’!! In all my time in this business, not one contractor has commented to me as Chestertons state: ‘as one told us the other day that we were the only firm that he did not have to pay anything to’. How did that conversation come about!! An article full of smarmy baloney.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I agree with Traditionalist these cheap advertorials from companies full of bullcrap saying how good they are and how they have a disruptive proposition is just cheap stocking filler when there is no real news Re the goody two shoes from Chestertons how can you take commission from landlords each month but ask for a supervision fee as well? So what are they actually paying commission for? If Mr landlord turned his back I suspect you would help yourself to his wallet too!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
As a landlord I would object to a ‘supervision fee’ however much the works cost, if the works were all done by one company. However if the agent got a better price buy using independent trades people, then I have no objection for paying for that.
I don’t like a % base charge, I would rather have a fixed ‘supervision fee’ based on the type of work, e.g. kitchen refit.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Or the number of hours / visits required?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register