Lettings Agency Fee’s

Since 27th May 2015 it has been a legal requirement that all letting agents must publish full details of their fees and charges. Ours can be found here for Landlords and here for tenants. Letting agents must publish full details of their fees and charges on their websites and prominently display them in all their offices where they deal face to face with customers.

However, some letting agents’ websites do not make it easy for you to see the fees they are charging. Aside from the usual, expected, costs, there may also be other hidden charges that landlords and tenants may not be aware of. The description of what each fee covers and how it is calculated must be clear so you can understand the service and costs covered.

If a letting agent doesn’t show its fees or make them clear you can contact the local council who are responsible for enforcement with fines on the agent of up to £5,000.

Amy Andrew from This is Money spoke to experts at Shelter and easyProperty to find out more about fees so landlords and tenants have the information they need to avoid being overcharged letting agent’s fees. The full article on the Daily Mail website can be read here

We carried out some local research and were surprised by what we found. We typed into google “moston letting agent” and took a look at the first 20 agents website that appeared – we ignored zoopla, on the market, rightmove etc etc and just looked at the websites for our 19 most local competitors (we were the extra one)

Of the 20 agents operating in this area a staggering 13 of them, that’s 65%, have NOT published any of their fee’s on their website, despite it being a legal requirement and them being liable for a £5000 fine.

fees1

If an agent is not publishing their fee’s, as they have been told to do, are they being lazy, ignorant or are they wilfully ignoring the law?

Whichever the three scenario’s, would you be happy leaving your property in the hands of an agent who is guilty of any of the above sins? I wouldnt!

In terms of fee’s, we could obviously only take a small sample of data, as so many agents have chosen not to publish their fees. But of the 7 local agents we found, we first looked at their Let Only Fee’s.

To make the comparisons fair we added up all the additional costs lurking around so each agent was offering for a 2 bed property at £550pcm:

  • Marketing & Advertising
  • Tenant Find
  • Tenant Referencing
  • Deposit Collections and Protection
  • Drawing Up Tenancy Agreement
  • Move in Inventory

Our fee for this basic service is £300 inc VAT below are all the fee’s we found:

fees2

As you can see fee’s range from £300 upto £660 for this single service. We didn’t inflate figures or stretch ourselves down to London to try and shock, all these agents are operating within a couple of miles of our office and these are the fee’s they are charging you just for a simple Let Only Service.

Completing the same exercise for a managed property was a little more complex, but don’t worry, we did it for you.

Sadly when looking further into FULL fee’s we lost another four of our agents, pushing our total of non compliance to the law to a whopping 85% of local agents have no published full fee’s for their landlords.

How did we lose 4 more agents to make this 85%? They were not publishing FULL fee’s, its all good saying what your setup and your commission fee are, but why aren’t the agents publishing their routine maintenance costs, gas safety, epc, electrical inspections etc? How can a landlord compare like with like, when there is so much secrecy?

Again, ask yourself why aren’t these agents publishing their fees? Is it ignorance of their legal obligations? Is it that they don’t want you to know their fees? Or is it simply that they cannot be bothered to update their website? Whatever the reason, do you want to work with these agents who are either lazy, ignorant or downright unlawful?

Our four remaining agents now went head to head with each other looking at total expected fee’s over the course of 12 months on a 2 bed property fetching £550pcm and having all its annual checks. here are our overall results:

fees4

There isnt a great difference between the 3 agents in terms of costing over the year, the difference in rates is about 9% – but thats only from the 3 agents out of 20 who actually published full rates, in accordance with the law. If we get the time to snoop around further it would be really interesting to find out what the real variety in fees is around Moston and East Manchester.

fees5

We obviously cannot publish the names of the agents who are not complying to legal requirements and any updates we receive we will endeavour to use to keep this information accurate.

What are your thoughts on this?

Are Your Agents Fee’s Misleading?

As of 27 May 2015, it became a legal requirement under the Consumer Rights Act for all agents to show their fees as VAT inclusive. This measure, I believe has been introduced to once again clamp down on those rogue agents out there who are hiding their fee’s and misleading their landlords.

I get a real bee in my bonnet about lettings agents fee’s. You may have read my previous posts on hidden fee’s, price hiking and unfair fee’s. I’m now on my hobby horse about misleading fee’s.

I think my anger around fee’s stems from a basic human quality of honesty and trust. The way I work and the way I run my business is in a very open, upfront and honest way. I can do this because i’m a small independant. I manage less than 1000 properties and the book stops at me. I don’t have shareholders to please and pay, I don’t have a board to answer to and I do what I do because I’m a landlord, a business owner and an employer. I’m not a tycoon, I’m not a millionaire and I don’t wear a suit.

I have been running Brentwood Lettings for almost 20 years, and I pride myself on the quality ad the value of service my agency offers to our landlords. We don’t, and have never, advertise prices exclusive of VAT, we don’t add commissions to our contractors rates, we don’t double dip fee’s from both the tenant and the landlord and we don’t overstate our costs.

It would be bad practise for me to point fingers directly at my local competition, but I know all of the above are happening on my doorstep, to landlords within my catchment area and they are happening week in week out and have been happening for years.

If I could get all the landlords in Manchester together in one room and have the opportunity to say one thing to them, just one thing, I wouldn’t self promote, I wouldn’t sell, I wouldn’t even tell them who I was, i’d simply ask “Why are you letting your agent rip you off?” and offer them my phone number.

 

We publish all of our fee’s so nobody is left in the dark and nobody is left wondering about charges.

Click Here to Download our fees for Let Only Services

Click here to Download Our Fees For Property Management

 

 

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Why Isn’t Your Agent Publishing Their Fees?

If you went to tesco’s and had to wait until you reached the checkout before knowing how much something cost, would you shop there? Would you trust tesco? Would you feel good about going back there? No No No?

hidden feesThen why are so many landlords dealing with agents who are not transparent about their fee’s? They tell you a fee, but don’t tell you its exclusive of VAT, or that it doesn’t cover this that and that or that there is an additional fee if you want this, or that once that fee is paid there is also x y and z to pay. NO!

I get a real bee in my bonnet about lettings agents fee’s. You may have read my previous posts on hidden fee’s, price hiking, unfair fee’s and misleading fee’s.

I think my anger around fee’s stems from a basic human quality of honesty and trust. The way I work and the way I run my business is in a very open, upfront and honest way. I can do this because i’m a small independant. I manage less than 1000 properties and the book stops at me. I don’t have shareholders to please and pay, I don’t have a board to answer to and I do what I do because I’m a landlord, a business owner and an employer. I’m not a tycoon, I’m not a millionaire and I don’t wear a suit. But I do run a good agency that looks after my clients and their properties very well.

Having run an agency for the best part of 20 years, I can see how it would, in the short term boost revenue for the agency. But taking a long term view and thinking like a business partner towards my clients, I wouldn’t want to work with someone who was being underhanded and would not place my trust in a business that was not being upfront and honest with me.

It could be because I’m northern, or because I’m working class or because I’m a landlord myself, but I believe anyone acting on behalf of your property should have your best interests in mind, and not the health of their bank balance. I don’t want to be ripped off and I want to be able to trust that my agent is working for me and not for themselves and their shareholders.

When selecting an agent in future Ask The Right Questions. You can’t compare agents on just their management fee’s (truth be told you can’t compare on just cost but that’s another post for another day), One agent may charge 15% the next 16% – whos the better agent? Nobody knows! Who’s offering the best value for money? Again, nobody knows; ask:

What do they charge for drawing up a tenancy agreement? What is their letting fee? What are the costs for an inventory? What do they charge for a gas safety certificate? What do they charge for an EPC certificate? What would they charge you to change a lightbulb? What would be the expected costs over the course of your entire first tenancy?

Don’t be afraid to ask the questions, do your due diligence and stop letting the big agents rip you off.

What Hidden Fee’s Are In Your Agreement?

As an independent agent, I’m very lucky to not be bound by big company practises and habits. I get to forge my own path and I get to sleep well at night knowing that my business runs in an open, upfront and ethical manner.

It’s disappointing that over the years the sneaky practice of charging an additional commission to contractors for passing work their way has become the norm. This is not only penalising all the sole traders and small businesses who rely upon agents for their livelihood, but it is also being wholly dishonest to those who have placed trust in their business, their clients- the landlords!

Property Eye ran an article related to the current news about Foxtons, it states that agents could be adding from 5%-20% on top of their contractors bills and passing these price hikes back to their landlords.

Having run an agency for the best part of 20 years, I can see how it would, in the short term boost revenue for the agency. But taking a long term view and thinking like a business partner towards my clients, I wouldn’t want to work with someone who was being underhanded and would not place my trust in a business that was not being upfront and honest with me.

It could be because I’m northern, or because I’m working class or because I’m a landlord myself, but I believe anyone acting on behalf of your property should have your best interests in mind, and not the health of their bank balance. I don’t want to be ripped off and I want to be able to trust that my agent is working for me and not for themselves and their shareholders.

hidden feesWhen selecting an agent in future Ask The Right Questions. You can’t compare agents on just their management fee’s (truth be told you can’t compare on just cost but that’s another post for another day), One agent may charge 15% the next 16% – whos the better agent? Nobody knows! Who’s offering the best value for money? Again, nobody knows; ask:

What do they charge for drawing up a tenancy agreement? What is their letting fee? What are the costs for an inventory? What do they charge for a gas safety certificate? What do they charge for an EPC certificate? What would they charge you to change a lightbulb? What would be the expected costs over the course of your entire first tenancy?

Don’t be afraid to ask the questions, do your due diligence and stop letting the big agents rip you off.

We publish all of our fee’s so nobody is left in the dark and nobody is left wondering about charges.

Click Here to Download our fees for Let Only Services

Click here to Download Our Fees For Property Management

I’m Mike Brown, the owner and managing director of Brentwood Lettings. I am a landlord, a property developer and generally someone who knows a thing or two about letting properties. I can always make myself available for a chat, feel free to call my office 0161 681 3724

 

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