“Young people renting flats … are easy prey for letting agents. Many of us endure the annual trauma of searching for a new flat, displaced by rising rents to cheaper parts of the capital. But, every time we move, most agents profit from our pain,” a journalist wrote for the Financial Times in an article titled ‘This is why millennials hate letting agents‘.
The article discusses tenant fees and the pain endured by tenants up and down the country, especially in London and definitely in Leicester, when searching for a new property to rent after their initial fixed term expires and the landlord or themselves choose not to look for a new property. In fact, the tenant fees charged by some agents hold tenants to ransom in their home, even when they want to move, as most don’t have access to the £900 tenant fees Danvers Estate Agent in Leicester would charge two adult tenants who requested a paper copy of the tenancy agreement to move into one of their properties to let or Connells in Leicester who charge a whopping £600 on top of the moving costs, the deposit and any termination costs associated with their current tenancy. Leicester Property Insight and Harry Albert Lettings & Estates, a Leicester letting agent, believes it doesn’t have to be this way. The article continues;
“… I made an offer to rent a south London property. The letting agent emailed us to outline the costs involved. As well as paying one month’s rent deposit and one month’s rent in advance, they charged us a one-off ‘admin fee’, this came to more than £700.”
The article then takes a slight turn for the worse, lumping all agents into the same bucket by saying;
“Letting agents rely on unjustifiably high fees to maximise profits; they also rely on young, cheap labour, which they can entice with the promise of a kind of watered-down 1980s-small-broker-outfit lifestyle, complete with bonuses and a company car,” however, this is not the kind of outfit run by Andrew Hill, managing director of Harry Albert Lettings & Estates. But we do see this quite often, as highlighted above. The exorbitant fees charged by letting agents has to stop and will stop in May 2019 as the government move to ban fees charged by agents. This, unfortunately, has a two-fold negative impact on Harry Albert Lettings & Estates:
- Harry Albert Lettings & Estates are well known for their fair, low tenant fees (it costs tenants just £125 per adult to move into on of their properties, on top of a refundable holding fee of £125). And;
- The fees charged by the agency only just covers the cost associated with referencing, credit and affordability checks, income verification and right to rent checks, as well as the time it takes to process a tenant application. By banning them from charging that fee, they will struggle to absorb the cost and feel, as the service is provided to the tenant, it would be unfair to charge this to the landlord, especially when it is expected that those who know will fail the vetting process will ‘try their luck’, for lack of a better term, wasting the small agency’s resources, time and money.
Letting agents are cast as villains with a catalogue of mishaps and organisational distasters which leave tenants at a disadvantage in terms of their negotiating position, not only is it unlikely that a tenant will deal with the same person twice (a deliberate tactic amongst many agents), if the agent senses even a slight hiccup or delay in the process, that’ll be it. You’ll never hear from them again and your fees will be gone. With Harry Albert Lettings & Estates, you’ll find both tenants and landlords receive a dedicated account manager, a single point of contact you can reach around the clock by phone, email and on social media. The agency provides a full, hands-on and personal service and most importantly, treats landlords and tenants fairly. Is it any wonder why their properties let on average in as little as 17 days without having to rely on Rightmove, Zoopla, OnTheMarket.com or any of the other large property portals?
In the case of the journalist writing for the Financial Times, “a typical visit [to a property they’d like to rent] would unravel as follows: We would arrive at a flat in Brixton, advertised as having two bedrooms. One of us would realise there was only one bedroom. We’d point out that the flat had been advertised as having two. The agent would apologise and gesture towards the living room, which could ‘easily become a bedroom’. But this flat was advertised as having a living room, we’d reply. The kitchen, he’d say, with a further limp gesture, is ‘arguably a living room’,” which is an argument we hear far too often and hope will come to an end with the introduction of minimum bedroom sizes.
“One day at roughly 1pm, I received an anonymous call. ‘Thomas, I have some very bad news”, the caller began. He paused. Our 2pm viewing had been cancelled because someone had already put down a deposit. For any given flat, it was clear that if we had an issue with the terms or the fees, there’d be someone else who wouldn’t.”
The £700 admin fee was nowhere near the most absurd moment in our hunt. After deciding to walk away, we discovered the same property was on the market with another agent, who charged an admin fee of only £120.
The other agent isn’t us and we are surprised to hear there are London agents who charge lower fees than Harry Albert Lettings & Estates.
The article continues to explain the dirty tactics of the first agent;
“When we made an offer through that agent, the earlier agents rang us to complain. If we had made an offer through a rival agent, they explained, they would take legal action against that agent to derail the offer.”
“This kind of behaviour can be very profitable, and they’re right, “given the high margins currently generated by admin fees; it is no wonder that the share prices of several property groups fell so sharply this week. For landlords, the outlook is more complicated. I think the argument that agents will ‘pass on these fees’ to landlords is questionable; landlords, unlike tenants, can simply choose a different agent. More importantly, the entire regulatory landscape is not prejudiced against them.”
The journalist is completely correct, landlords can just go elsewhere, provided they’re not locked into a contract and they’re not held to ransom by termination fees as high as one third of the annual rent such as in the case of Keywest Estate Agents in Leicester, the average 3 bed property in Leicester rents for around £750, so the termination fee would be an eye-watering £2700 which will cause a major dent in the landlord’s profit margin after tax, any bills (accountants fees, management fees, insurance, subscription fees, etc) they need to pay and the costs of repairs and maintenance and in the event the agent sourced an unsuitable tenant who failed to pay their rent, which is common with Keywest as most landlords who pay for their property to be managed disagree with paying a £60 charge just to reject an unsuitable applicant that Keywest had found, makes the termination fee even more extortionate.
The article continues quite rightly in saying;
“Ballooning letting agent fees have had an impact on the millennial balance sheet. When abolition comes, it will be welcome, but these fees are just one small, particularly vicious consequence of a vastly greater problem with the London housing market — part of an imponderable tapestry of dysfunction that makes up the modern city” and arguably, the rest of the United Kingdom.
One question we have been asking and haven’t received an adequate response is what exactly are the tenant fees paying for? Why can some agents get away with charging nearly £1’000 in tenant fees to a couple before the deposit, first month’s rent upfront and before the tenant has paid for a moving van to transport them to their new home when other agents, like Harry Albert Lettings & Estates only charge £250 (£125 each) for the exact same service?
This is why we wholly support agents with a Fair Fee Guarantee and this is why agents like Harry Albert Lettings & Estates stand out from the crowd with a fantastic relationship with the local authority and local businesses and have been nominated for an award recognising their outstanding achievement over the year they’ve been in business so far.
Harry Albert Lettings & Estates let their properties within 17 days on average and tenants flock to them because of how they know they will be treated all year round. Harry Albert Lettings & Estates prides themselves on making your property, whether you’re the tenant or the landlord, their priority 365 days a year, they’re open on Christmas and New Years Day, during bank holidays, evenings and weekends. If they’re not available on the phone immediately, they’ll always be available via email, social media or text message. The company officially opened for business on the 1st January 2018 in response to the news reports of rogue agents and landlords and the poor treatment of tenants in the process. They wanted to set a real example and they have so far been successful, but they can’t do it without their clients, this includes both landlords and tenants, both of whom held in equally high esteem. So, if you’re looking for somewhere new to live and you’re sick to death of high agency fees, or if you’re a landlord hoping to actually generate some profit from your property this year, get in touch with Harry Albert Lettings & Estates today on 0116 321 4970.