Seven out of eight biggest letting agents ‘charge tenants more than average’, claim

Out of eight of Britain’s biggest letting agents – those with over 100 branches – seven are charging tenants more than the average fee.

The accusation comes from Generation Rent, which says its research shows that the average cost is £404, based on two adults renting an unfurnished two-bed property.

LSL, parent company of Your Move and Reeds Rains, is the only one of the eight to charge less than the national average, at £381.

Generation Rent says Leaders/Romans charge different fees in different parts of the country, but across six branches the average is £593.

This, it says, is boosted by a branch of Romans charging £813.

Connells Group charges a consistent £570 throughout its network.

Spicerhaart charges £540 across several brands, while The Property Franchise Group charges an average of £476 across the 15 branches in Generation Rent’s study area – London and parts of the south.

Generation Rent accuses one branch, Martin & Co in Brentford, of being “opaque” about its check-in fee, and says the £476 is “likely to rise if and when Brentford opens up its fees policy”.

Hunters branches in Wokingham and Stoke Newington are also accused of failing to specify check-in fees, and Generation Rent has raised concerns with the respective councils “which have responsibility for enforcing transparency rules for letting agents”.

The average for Hunters branches is calculated at £416.

Belvoir charges an average of £414, but Generation Rent says this goes up to £590 in its Balham office.

Generation Rent also singles out Spencers Property Services in east London, with a charge of £742.

Dan Wilson Craw of Generation Rent concludes: “This breakdown shows how important tenant fees are to the larger estate agents – strip them out and our national average comparison fee would drop.

“Also, we can see that using one of the big boys does not necessarily mean they are automatically transparent.

“The gilded age of the letting agent is now under threat from the Government’s proposals to ban fees, which are out to consultation.

“We should expect a determined fight-back from agents so it is essential that we make our voices heard.”

He also describes the tenancy renewal fee as “an incredibly successful British invention”, alongside steam trains, TV and vaccines.

He describes agents as a “group of entrepreneurs [that] have exerted their creative minds to produce the £250 photocopy and are currently raking it in”.

He accuses them of “milking” cash out of their captive market.

http://www.generationrent.org/celebrating_ingenuity_in_the_property_industry

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35 Comments

  1. lizi82

    I am a letting agent and am shocked at the prices above We as a company do charge out tenants £300 inclusive of Vat – I also believe we are one of the best agents in our area and believe our tenants are important and we will always go the extra mile and help them as much as possible from start to finish at times it can take several hours, from time to time tenants may fail referencing and we have to start again with a guarantor, move in dates change, adding another person to the teneancy, extra viewings before moving in to measure up, changing their minds, choosing another property that just came on – the list is longer and then some tenancies are smooth sailing from the beginning , I need a member of staff to deal with all of this, if the fees go ahead and get banned instead of being capped – I know my service will not be able to be good and I will have to make at least one member of my team redundant – I will also have to change some of my services for out of hours help. I think tenants in the long term will end up paying higher rents and will not get the service they do today,

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    1. pahsami91

      I am interested in your project/business, I am looking for entrepreneurs with the right mix of experience, drive, creativity, and cultural fit. I am will provide funding,  and resources to help my partners reach new heights of success. I am willing to invest upto $200 Million USDDo you have any project that needs funding? I am wondering if this would interest you.  PahContact: (pahsami@gmail.com)

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  2. Essjaydee51

    Another gen x story with no balance showing only the top end, where is the mention of the many independent agents whose charges are way lower!

    we charge £330 from point of ref to signed contract but nobody called to get our rates or perhaps they did but it doesn’t aid their cause!!

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    1. lizi82

      well said – no one asked me either and I am a small independent company with my fees showing on all the sites.

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    2. FromTheHip64

      Nothing to shout about…..still far too much. Just charge them the referencing fee and bill the the rest to your client….the landlord….the one who you’re working for.

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      1. HonestAgency

         
        FromTheHip64. This is a rhetorical question so please don’t bother to reply as I have seen your generic reply’s many times. If a tenant comes into my shop, sits down with a member of my staff, asks numerous questions about the process of renting, seeks advice on the best areas to live, best schools etc., seeks advice on what their rights are as a tenant, from this information happily provided by my paid member of staff, goes on to book viewings at multiple properties then decides….
         
        A) I’m not interested but thank you anyway
         
        B) Yes, thank you I will take one of the properties you have shown me.
         
        Do you honestly feel that the tenant has not received any service worth paying for by then even before the works on the tenancy. Should we limit their viewings to just one per tenant as we will only be receiving a fee from one landlord?
         
        There is an option for tenants not to pay fees. Go on Gumtree and hand money over to a complete stranger. Tenants don’t like doing this though they would rather use an agent. Therefore, seeing their “worth”
         
        Whether you like it or not, when the ban comes in which it will, the fees charged to the tenant will be passed to the landlord. They in turn will increase the rent. This will be paid until the tenants moves out and will in the long-term cost them more. Jump up and down with glee when the ban comes in like “job done”, but keep a careful eye on rental prices. Job done indeed !!
         
        Back to my old point. If I started a parliamentary petition stating “All Ice Cream should be Free”, who wouldn’t sign it ?? Doesn’t make it right.
         

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        1. lizi82

          I’ve started putting our rents up between £50 & £75 a month and they are letting – so in my neck of the woods the tenants are already being charged more! By a minimum of £600 pounds which in my world means I am charging the landlord more – he isn’t loosing and neither am I – the landlord my have more costs but is up by £300! And I’ve no loses – it will obviously just take me longer – I have spoken to every landlord on my books and they are happy as long as they are not out of pocket – but my tenants are – plus I also won’t have the same attitude as I have now – 2 paying clients! Both being dealt with and treated the same – when this ban comes in as it will my only client will be my landlord! Tenants will be loosing! 

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      2. BillyTheFish

        “bill the rest to your client” – what exactly is “the rest”? Can you advise.
        EG – you forgot the professional third party inventory, check-in and check-out service which is required by the Landlord to protect their property and the Tenant to protect their deposit. Why should the Landlord pay for all?
        I think you may be from a different sector of the industry and perhaps don’t quite understand this one fully.
         
         

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        1. aSalesAgent

          Please correct me if I am wrong, but isn’t the deposit returned in full if the LL cannot evidence unreasonable damage/wear? Therefore the inventory is only for the benefit of the LL (?).

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          1. BillyTheFish

            How many deposit returns have you been involved in?

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            1. observer

              aSalesAgent is absolutely right.
              In 99.9% of cases involving a dispute, if there is no inventory then the resolution will be on the side of the tenant.

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              1. aSalesAgent

                BillyTheFish, I must admit I work in a different sector of the property industry and do not deal with inventories, registering deposits or disputes. However, I am based in an office that has offered a professional lettings service for almost 30 years. I hear a lot of what goes on and seemingly picked up a thing-or-two that you “perhaps don’t quite understand” fully.

                Thank you observer for confirming – I thought that was the case.

                In case there is doubt, I do NOT support an outright ban of tenant fees.

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              2. BillyTheFish

                You may well be right there SalesAgent, who I am guessing specialises in selling property, but Landlords inevitably fight for deductions anyway.
                As an ARLA agent we have to use the TDS who have roughly a 80% market share for the schemes. MyDeposits and DPS custodial schemes support your point as they make the decision on deductions and forward funds (on the basis they have been sent the deposit by Landlord/Agent).
                As no doubt you are aware insurance scheme deposits can only be returned if a Tenant AND Landlord give permission so if there is a dispute, even one where there is no inventory, the return can effectively delayed for a long period of time or be put off indefinately. Well, I say indefinately but after 6 years it can be given back, to a charity.
                A professional inventory makes this process far simpler as everything is in black and white for both parties involved = less likelihood of a dispute = faster return of TTs deposit. I think that is in both party’s interests personally, but it is only my opinion based on experience.

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                1. aSalesAgent

                  Thank you for the insight.

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      3. lizi82

        I’m not  just working for the client – the landlord – I’m also working for the tenant – my other client! They are both equally as important – they just have different needs and they both need a service! And quite frankly most of our time is spent on tenants not landlords!

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  3. Eric Walker

    Happy Groundhog Day. Is this not a little late? And what’s wrong with vaccines and TV? Ok, so steam strains are making a resurgence but really, I think we have moved on and are very clear on the plans ahead.

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  4. waco79

    Let’s compare the national average fee against……fees charged by Southern branches, because that’s fair.

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    1. lizi82

      I am happy for the fees to be capped but a complete ban will prevent me from offering the service I do today as I need the staff to be able to do this! I feel big corporates that have been charging excessive fees have made life difficult for the small independent companies that do not over charge and also offer better services to tenants! 

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    2. jeremy1960

      I agree with waco79 but isn’t it the same every time? Journalists seem unable to travel beyond the m25 so assume that everywhere is the same as London. Pseudo charities like shelter and generation twit are the same, let’s face it, if they had to travel very far or actually do real research that cost them money then they wouldn’t be able to pay their directors as much or employ so many staff because as costs rise then something has to suffer – sound familiar?

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  5. Eamonn

    He accuses them of “milking” cash out of their captive market.  He sounds like Karl Marx himself.

    Go to Wembley stadium, the O2 or any major arena when an event is on.   Or even better a one way ticket through Heathrow airport.  He will be greeted by people wearing ID badges selotaped to their bicep.  They will remove even a half eaten packet of crisps in the interest of “security”. Go inside and you have a cartels charging  10x the high street price.  A bottle of beer will cost £11

    What he is suggesting is tantermount to agents  remove applicants pens and the name charge them for signing agreements.    It’s shows a lack of understanding what needs to be done.

    On the other side of his arguement, yes the big players are the clearly the most naughty and for want of better words ” taken the Miss”  from too many for too long.   Dispite all the warnings they have brought a bunch of commuincist fanatics down on our industry that give a vote winning arguement to politicians.

     

     

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  6. mrharvey

    GR need a much bigger sample and geographical spread for this to be newsworthy.

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    1. Woodentop

      You’re hoping. They have manipulised facts for their own means.

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      1. mrharvey

        Manipulated?

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        1. Woodentop

          I have just been taken outside and flogged. Got it right, further on.

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  7. James

    The ‘big players’ are always the ones who charge the most. What does a new boiler cost from British Gas, as opposed to a local trader?

    The big players will be hiking their Landlord fees when the ban inevitably comes in to place too. That will be where the smaller agent, who provides the best service, will find their place in the market….and without having to slash Landlord fees (and overcharge the Tenant)…… Hallelujah!

     

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    1. pahsami91

      I am interested in your project/business, I am looking for entrepreneurs with the right mix of experience, drive, creativity, and cultural fit. I am will provide funding,  and resources to help my partners reach new heights of success. I am willing to invest upto $200 Million USDDo you have any project that needs funding? I am wondering if this would interest you.  PahContact: (pahsami@gmail.com)

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  8. Beano

    The big players have happily forced their staff to rip people off in making these extortionate charges. I for one could not look a tenant in the eye and tell them my costs amount to these sums without them knowing I am a liar and a fraud.

    To then add on check out fees and renewal fees etc, it was always going to end this way. Well done.

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  9. Dene

    The big greedy companies have spoiled it for the small Letting Agencies, this is pure greed as we only charge a one off fee of £230.

    Hopefully when this ban comes into force they are the companies who will feel it the most.

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    1. pahsami91

      I am interested in your project/business, I am looking for entrepreneurs with the right mix of experience, drive, creativity, and cultural fit. I am will provide funding,  and resources to help my partners reach new heights of success. I am willing to invest upto $200 Million USD
      Do you have any project that needs funding? I am wondering if this would interest you. 
       
      Pah
      Contact: (pahsami@gmail.com)

      Report
  10. PWProperties1

    I really dislike the fact that we are all being lumped together because larger agents over charge tenants. I would not dream of charging those prices as stated in the report as they are grossly unfair. I am an independent agent, I work alone from home and my fees are openly displayed on my web site. I always email or give to a tenant a copy of my terms of business showing all fees before a viewing or before any transaction is agreed. My fee for one person is £230.00 and £275.00 for two.

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  11. Woodentop

    Not supporting overcharging but geographically no business can be compared same to other parts of the UK. Done so often to manipulate the truth. I’m all for a capped rate but even that is likely to be argumentative but probably the only way forward? My money is on a capped rate, which will be higher than we charge now (2 figures)!

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  12. wardy

    Might be a bit late now but perhaps EYE could create a simple survey of what we are all charging? The readership is probably a good cross section of agents up and down the country and would be a far better comparison than the one used by GR.

    I’d go out on a limb and suggest the true figure is half of what GR are suggesting.

    At least GR have, this time acknowledged the difference between larger and smaller agents.

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  13. MKM1979

    Well at least this time they have decided to highlight where the issue originated from…. Grateful for small mercies and all of that! Surprised nobody commented on their blog piece though. I did tweet a response to Shelter the other day about a cap, not a ban because of the affect of a ban on low income and benefit tenants… they didn’t reply.

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  14. pahsami91

    I am interested in your project/business, I am looking for entrepreneurs with the right mix of experience, drive, creativity, and cultural fit. I am will provide funding,  and resources to help my partners reach new heights of success. I am willing to invest upto $200 Million USD

    Do you have any project that needs funding? I am wondering if this would interest you.

    Pah

    Contact: (pahsami@gmail.com)

    Report
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