England’s largest letting agents are charging some of the highest fees to tenants, found research by lobby group Generation Rent.
Upfront fees can set a typical two-person household back £404 on average when they move home. Seven of the eight largest letting agents with more than 100 branches are charging more than that.
Some major firms are also failing in their legal duty to publish full details of their fees in their branches and online, with lack of clarity around check-in fees making it difficult for tenants to compare agents’ costs.
Romans charges the single largest upfront fees to two adult tenants, at £813.
Countrywide follows, at £622, which includes the admin fee, reference fee, tenancy agreement fee and check-in fee. The company made £19.5m in pre-tax profit in 2016.
Leaders follows closely behind, at £593, while Connells charges an average fee of £570 to start a tenancy.
The cheapest of the largest letting agents in the country is LSL, whose Your Move and Reeds Rains brands charge an average of £381.
Some agents don’t charge tenants at all, including Piper Property in Bristol and Bath, and East & Co in Walthamstow.
Letting agents are legally required to publish details of their fees in their branches and on their websites.
Some branches of Hunters and Martin & Co are not publishing clear details of their check-in fees, which vary depending on the size of the property. This makes it impossible for tenants to compare the upfront fees being charged by these agents.
The Wokingham and Stoke Newington branches of Hunters do not specify check-in fees, while the Ealing and Hounslow branches appear to charge for both check-in and inventories, which are normally classed as the same thing.
Generation Rent raised its concerns with Wokingham and Hackney councils, which have a responsibility to enforce transparency rules for letting agents.
Martin & Co’s Brentford branch does not specify its check-in fees.
The research process used the typical private tenant household of two adults renting a two-bedroom home to calculate the comparison fee. This comprised fees that the average household would have to pay at the start of the tenancy, excluding deposits and rent.
The Director of Generation Rent, Dan Wilson Craw, says: “When you’re desperate to put a roof over your head, you will tend to take the first property you can afford the rent on, and fees are an afterthought. Some agents have realised that this makes tenants a captive market and decided to charge them as much as they want, which results in the staggering variation in fees we have discovered. Those greedier agents have now grown fat on the rainy-day funds of renters.
“With a ban on fees, letting agents will have to start charging landlords instead, who will find it easier than tenants to shop around for a cheaper agent. And without fees to pay, renters will find it easier to move out of an unsuitable home, which also puts them in a stronger negotiating position over rent and repairs.”
He adds: “These major chains have a vested interest in resisting the Government’s proposals, so it is essential that all parties commit to enacting the letting fees ban after the election.”
If letting agent fees are passed onto landlords, many may be forced to put their rents up to cover the extra costs.
As a result, tenants may actually find it harder to locate an affordable property, or may struggle to cover increased rent prices. Landlords should prepare for an increased risk of rent arrears by protecting their income with Rent Guarantee Insurance.
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