My daughter and her boyfriend are just taking the step of moving in to their first house together. They have no chance of a mortgage so have no choice but to rent. I have never rented so have no idea of the ins and outs of it.
They have been searching for a while as property in our area is quite scarce and as first time renters, the landlords and agencies seem to give preference to people that have a history of renting so for many properties although they have been the first to view, someone always seems to pip them at the post.
Anyway, they have now found a property and have been accepted. They have had to pay a 'Goodwill Payment' to secure the property (£500).
It is now going through the credit check process etc. It was only today that I saw the invoice (i.e. the letting agency fees) and I must admit, they seem extremely high to me. But as I don't know the rental market, I have no idea whether they are high or normal.
Now I understand the first month's rent and the the deposit, but looking at the invoice, it seems the letting agency are taking £852 in fees that is just for their services. Unfortunately, they have to use that particular letting agent as that is where the house is advertised and doesn't appear anywhere else.
This seems rather excessive to me, especially as a full, professional credit check is about £20 each and I imagine that the contract is purely a standard contract that they just print-off.
And they charge the landlord too, its legalised robbery, been renting privately for 18 years. The last place we rented we let the contract run out and went on to a rolling contract (this happens naturally)for a few years before we moved to our current rented place but that didn't stop our letting agent from wanting to charge us for it. I told them where to go!
So to answer your question, letting agents can pretty much charge what they want unfortunately
It must be a nightmare these days for both the tenants and the landlords.
Many years ago I owned a property which I rented out. I spoke with a local friendly solicitor who was kind enough to give me the wording for a contract and tenancy agreement. I advertised the property privately, interviewed a prospective tenant who I deemed to be suitable, got them to sign the contract and to give me £200 deposit (a returnable damage waver should they leave the property in a state), and all was hunky dory.
I guess things have changed these days and nothing is simple any more.
I definitely think I am in the wrong business. The agency are going to get £852 to what amounts to less than an hours work total. The property was advertised on the website and my daughter saw it almost immediately it came on. The agency took her to the property which is less than a 3 minute drive from their office. Twenty minutes later the deal is done. All they have had to do is the credit checks for 3 people (my daugter, her boyfriend and a guarantor) which is sitting in front of a PC and typing in the details. Then basically printing off a copy of a standard contract changing the names and address. A little bit of phone work to the landlord (which I assume he is also going to be charged for). It is an unfurnished property so I cannot imagine there is much work on the inventory of which she is being charged £72 for and states it's a contribution to the inventory (I imagine the landlord is paying something for this as well).
It has opened my eyes to the rental market and the agencies really only have themselves to blame for the criticisms and the threat of banning tenancy fees. I have no problem with them making a reasonable profit and covering their costs, but this is excessive charging.
Having a read up on it, the agencies are saying that it will push rental costs up if fees are banned. The landlords have a choice as to which agency they choose to have manage their property but the tanant doesn't. They have to go with whatever agency the property is advertised on. If fees are banned, the landlords will choose agencies that are offering the most reasonable deals. If an agency charges high fees, they just wont get the business.
The fee banning is too late for my daughter but I really do hope it happens so that other people stuggling to get property have a chance.
I've got several properties that I rent out, I wouldn't dream of charging people that much,maybe that's why if one comes vacant I can let it to a new tenant very quickly, and also why they stay with me for years
I have one property I let. I used OpenRent (an online agency)to let it in 2013, they were relatively new then. I had a free trial of their services. The only charge was to the tenant - approx £20 for credit checks. Found a tenant within a week, he's been there for 4 years now. Their charges are still low and I'd use them again if necessary. I have been on the other side of the fence and rented myself in the past, but luckily not charged anywhere near the amount mentioned above.
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Topic: Tenancy Agreements
