Letting agents charge an average ‘administration’ fee of £220 to secure a rental property in London, the equivalent cost of nearly ten weeks of food shopping for the average person*. Nearly 25 per cent of the London letting agents surveyed charge over £300 in administration fees, with the most expensive agent charging £600 in East Ham – more than half a year’s worth of food shopping.
Unsurprisingly, the most expensive letting agents were all found in London. Bristol was the only city with a higher average fee of £251.
George Spencer, CEO of Rentify, said:
“As if it wasn’t bad enough that letting agents charge these unnecessary administration fees to tenants, some of these charges are also passed onto the landlord so the agent makes double the profit. These fees lack transparency and are simply unfair. Sometimes they cause tenants to pull out of properties because they have not been disclosed upfront, or budgeted for.
The Advertising Standards Authority has ruled that from next month these costs must be clearly displayed in adverts alongside rental prices but there is no onus on agents to make their charges fairer, or better still, remove these unnecessary fees completely.
These figures are especially interesting in the light of Communities Secretary Eric Pickles’ recent promise to cut down on rogue agents through compulsory redress schemes. Perhaps Mr. Pickles could have gone further by seeking to introduce new regulations, such as a qualification scheme for agents. At the very least, Rentify’s research lends strong support to the view that urgent action is required.”
Key findings:
• Letting agent administration fees varied significantly across different agents and areas, with some not charging any additional fees. Those that do charge them, on top of the standard deposit and one month’s rent in advance, say they do so for drafting tenancy agreements and conducting reference and credit checks.
• Typically, the time spent doing this work is 90 minutes, which means the letting agent is charging the tenant £146 per hour to complete these tasks.
• The survey also found that the average fee for a credit check was £50, a task that costs letting agents less than 20 pence if bought wholesale - usual practice for larger agents.
Mr Spencer added:
“Rentify is committed to saving landlords and tenants money. Our research exposes the need for greater transparency in the rental market. We charge a flat £15 fee for a thorough credit check with no other ‘hidden’ extras. It can be done.”
