An online lettings platform is attacking agents for their fees, which it describes as a “waste” of landlord funds.
Hello Neighbour, a platform that currently operates only in London and some other southern England areas, says of the over one million rental properties in the capital, an estimated 760,000 use traditional high street letting agents.
It claims that with the average tenant in London staying in their rental property for two years, landlords are currently paying renewal fees on 380,000 properties each year.
The platform then claims the average fee is approximately 8.5 per cent including VAT “meaning that for an average London rent of £2,500 a month, landlords are handing over an additional £2,550 to letting agents for their current tenants to simply renew - literally money for nothing.” And a statement from the platform then accuses the industry further by saying such a fee is just for the second year and comments: “If a landlord is lucky enough to keep the tenant for a third year the cost just keeps adding up.”
The platform is launching a Stop Renewal Fees campaign - which people can sign only if they supply contact details.
Phil Shelley, chairman of Hello Neighbour, says: “For too long, high street agents have taken advantage of landlords by charging fees for things that just aren’t fair - especially renewal fees. It’s crazy to think that landlords are handing over this kind of money every time their tenants simply choose to stay in their home for another year.
“Punishing landlords for having a great property that people want to remain in is just absurd. Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them. So in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.”
Hello Neighbour - founded in 2018 and currently operating in London, Brighton, Oxford, Guildford and Reading - says it is launching “a self-service offering” in January which will be available for the whole of the UK.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
%20(002).png)
.png)
.png)
%20(002).jpg)
Join the conversation
Jump to latest comment and add your reply
This is hilarious, 8.5% of the rent to renew?
The majority of agents charge a small admin renewal fee to cover costs and make a small profit. Like £100 - £200.
So what they are saying is these agents should provide the service for free. We all know that averages are just that. What if the tenant renews each year for 10 years, as some do - the agent should just do this for free because £100 - £200 is a rip off.
Or is it because they want to harvest data in their ‘campaign’?
I’d love to see how this free service looks when it’s ready too, please post it here.
Shall we refer to the Foxtons case a long time ago where it was deemed an unfair term to charge let only landlords for a 2nd or 3rd term, some agents will still charge if they are able to get away with it but I would rather just charge a nominal fee of £150 for doing the paperwork and have a happy landlord and tenant and not a huge fine from the courts
The court didnt rule it was unfair for Foxtons to charge landlords it centered on two parts of their terms, the Court ruled were unfair. 1) the bit on renewal fees was not transparent and easily understood, hence from that point forward all agents had to put in bold etc. 2) Foxtons tried to charge investment landlords a renewal fee having inherited a tenant as a buyer. The Court said the old terms would not apply to them.
There was no restriction or ruling on how long an agent could charge a landlord, thats simply a commercial reality that agents and landlords agree between themselves or not. A great deal of larger agencies still charge renewal fees in 2nd, 3rd terms as do Foxtons if you read their terms.
Hello Neighbour, are they another game changer/industry disrupter? Next they will be crowd funding to go nationwide.
Please login to comment