A spokesman for the mortgage firm Ocean Finance has made a startlingly outspoken attack on the private rental sector, accusing letting agents of charging “rip off” fees.
Gareth Shilton, spokesperson for Ocean Finance, says that “tenants are facing rip-off fees from letting agents, not just to take new tenancy agreements, but also to roll-on an existing tenancy for another six or 12 months.”
Shilton claims that as demand for rented properties continues to outstrip supply, many people “struggle to get on to the housing ladder” with “landlords in a strong position to continue to increase rents each time a tenancy agreement ends.”
He says that a survey of 2,000 people across Britain shows that 60 per cent of tenants saw their rent increase at the end of their tenancy, with the hike typically being an average £84 per month or £1,008 per year.
The survey also apparently shows that, in Ocean Finance’s words, 13 per cent of tenants are “hit with fees to extend their existing contracts” with the average charge being £117.
The survey also shows that over half of tenants stay in the same house for five years or more, thus apparently paying almost £600 in letting agents’ fees as contracts are renewed.
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We don't condone any agents applying "rip-off" fees. However, I wonder what fees Ocean Finance apply to their mortgage applicants? Is this another case of the "pot & kettle" ?
This from a company which charges 34.9% interest on their credit card.
Are you having a laugh? Is this the same ocean finance that charge 34.9% APR on their loans and credit cards?? I pay 3.5% or thereabouts with FirstDirect so who is the rip-off merchant here? POT...KETTLE....
I totally agree; there are some agents that charge too much. There are also some mortgage brokers that charge too much; such as Ocean Mortgages whom charge a broker fee of up to £1995!
Didnt the PRS just say that renewal fees for tenancy are unfair?
Couldn't agree more @Steve! I wonder what the customers of Ocean's Finance would think of their fees.
Ocean Finance attacking people for excessive fees! Hehe. Once again, satire is made redundant by real life.
What's that saying about people in glass houses? Startling hypocrisy from Ocean Finance. By all means have a go at letting agents fees, but make sure your own house is in order first.
Can I make a startlingly outspoken attack about their woeful TV adverts?
Pot and kettle definitely springs to mind. I'm not sure the powers-that-be really thought this through, did they? Surely the knew they would be accused of hypocrisy given the fees they charge and the APR they have on their loans and credit cards?
Baffling in the extreme.
Agreed @Jon. An enormous face-palm moment from Ocean Finance on this one. Did they really not expect negative backlash to come from their attack?
I agree with the sentiment but this is the wrong man from the wrong organisation to be delivering the message. Too many lettings agents charge too much for too little work. Landlords have a responsibility as well. They should realise that if the agent charges very high fees the pool of prospective tenants for them is diminished. Excessive and unfair fees can also create friction between the tenant and landlord, undermining their relationship.
I am an estate agent, lettings agent and landlord. The increase in government regulation I have seen over my 20 years in this business is phenomenal and agents need to be paid for the work they do managing the tenancy. They also need to make a profit for their businesses. However, I am very keen to see the rogues and rip off merchants named and shamed. Landlords and tenants can then make a better informed decision on who to place their business with.
Yes, the sentiment is correct, Andrew. Letting agent fees are unfair and regressive - as you say, rather than increasing the pool of tenants, it does quite the opposite. And tenants and landlords starting off on the wrong foot is never going to go down well.
Sadly, I'm not sure the rogues will ever be completely eliminated. There will always be a criminal minority out to make a quick buck, no matter who they put in danger along the way. But we can certainly make it as difficult for them to operate as possible, while not punishing the landlords out there who do a good job. Easier said than done, though.
Letting agent fees is something that needs to be properly discussed, but the Ocean Finance bloke is totally the wrong person to be bringing it up. Did he take leave of his senses this morning or something?
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