Most main stream high street letting agents are charging landlords 20% to 40% of their monthly rent in fees. At the same time, services are getting poorer. Distant call centres, amateur inventories, failure to meet repair obligations, significant mark up on repairs that are carried out and poor communication are amongst the complaints.
On top of this, many high street letting agents have removed important services from their monthly fee and are now charging them as extras. In a nutshell, they’ve adopted the budget airline model.
So, what are you really paying for and what can you do about it? Let’s take an in-depth look.
What additional fees do letting agents charge?
Services that used to be included in the letting agent’s fee are now added as extras. Here are sample additional fees we have seen locally:
- £600 rent setup fee for new tenants
- 17% management fee
- £50 tenant referencing
- £200 for an inventory
- £60 smoke alarm check fee
- £80 to register a deposit
- £25 key cutting fee
- 4% of monthly rent for rent guarantee and legal cover
- £13.20 per month compliance fee
- 25% contractor commission
- 12% for arranging maintenance work
- £100 rent review fee
- £200 renewal fee
- £120 right to rent re-check
- £60 annual statement
- £90 service of notice
- £150 for a checkout
- £120 checkout dispute fee
- £250 court attendance fee.
These fees can be hidden within the small print of an agent’s contract, so it’s important to check thoroughly.
Why are letting agents using the airline model of charging?
The change began in June 2019 when the Tenants Fees Act banned letting agents from charging fees to tenants. They were no longer able to charge applicants for references and inventories, for example.
On top of this, their business costs have increased in recent years, just like everyone else’s.
These growing costs have been passed on to landlords.
Beware of hidden fees and low-quality service
Letting agents advertising low monthly fees will expect you to pay higher fees for extra services, or they will deliver a lower quality service or both.
The result could be poor tenant selection, delayed maintenance and repairs, and poor communication. This will cause you more financial hardship in the long term, especially if it leads to damage to your property, legal disputes with tenants, or longer periods when your property lies empty.
It’s vital to research a letting agent’s track record and reputation. You should look for an agent who has a good understanding of the local market, who delivers a high level of service and who is transparent about their fees.
Ultimately, choosing a letting agent should be a balance of price and quality of service.
How do you know a letting agent is reputable?
These are some ways to determine if a letting agent is reputable:
- Check their accreditation. Are they a member of a professional body such as ARLA Propertymark, SafeAgent or The Property Ombudsman? If they belong to a professional body, they will have met strict codes of conduct and standards, giving you peace of mind. Rockett Home Rentals has earned the ARLA Property Mark and the Property Ombudsman standard.
- Check online reviews. Look for online reviews on Google, Trustpilot or Yelp. This can give you an idea of their professionalism and quality of service. At Rockett Home Rentals, we are very proud of our online reviews and testimonials!
- Ask other landlords for recommendations. Talk to landlords in your local area either through online forums or in person. This is the best way to find a letting agent you can trust.
- Visit the agent’s office and meet their staff. Do they seem friendly, approachable and trustworthy? Are they knowledgeable of the local market?
Lastly – and most importantly – read the letting agent’s terms and conditions! Make absolutely sure there are no hidden charges for ‘extra’ services, and they are transparent and fair about their fees.
Fair letting agent fees with no hidden costs
At Rockett Home Rentals we strongly believe letting agent fees should be fair and transparent. We know landlords face spiraling costs, and we want to help.
We are confident that by switching to us you can save a significant amount of money a year.
For instance, if your tenant’s rent is £1,000 PCM, with all of the above management deductions you would normally net £7,068 a year. But with Rockett Home Rentals you would net £9,600. So, that’s a saving of £2532 – more than 2 months’ rent.
With us, you don’t need to worry about hidden costs. We never mark up our contractor fees or any other costs. You always know exactly where you are, which makes it easier to budget.
You will be pleased to know that fair pricing doesn’t mean we compromise on service. All management is conducted from our office in Newcastle Under Lyme, not from a distant call centre. We pride ourselves on delivering outstanding customer service to you - every time.
To find out how we can help you, please ring 01782 638111 or contact us through our website.