Concerns over letting agent fees are growing, with a leading buying agent claiming that overseas investors are left surprised with the perceived high costs.
Henry Sherwood is managing director of The Buying Agents, an agency which helps wealthy overseas purchasers find property, says that many are put off by high fees.
‘Foreign clients are delighted for a buying agent to find a property and negotiate a good price in return for a 1.5% fee,’ said Sherwood. However, he went on to say that, ‘they then let it out and can’t believe the 10 or 20 per cent charges they receive from letting agents.’
In comparison, Sherwood believes that the majority of UK landlords take these fees as mandatory. ‘Most don’t even look at what the charges are for,’ he said. ‘Smaller items of a few hundred pounds are often lost amongst bigger costs of 10 per cent for this and 6 per cent for that.’
As a result of these fees, Mr Sherwood says that he prefers agents of property management services that offer alternatives.
Foreign investors unhappy with agents fees
An example of a company that does things differently is Happy Tenant. Founded by media lawyer Jonathan Monjack, the organisation levies an annual fee, with a one-off charge when a new tenant moves into a home. Next, the company flexes its bulk purchasing muscles to secure cut priced services from mainstream agents to find tenants, alongside a variety of services to handle EPCs and everyday maintenance.
Sherwood believes that the result is a membership-style agency that charges less than a traditional agent for very similar services.
‘We have also heard of situations where landlords actually think agents are inventing jobs during quiet periods to increase their revenue,’ he stated, before going on to say in many cases, ‘the landlords does not even know it is happening, they simply think they have bought a dud or are abroad so have no way of checking.’