In a review undertaken by Direct Line for business, it was discovered that several letting agents are guilty of charging both tenants and landlords for the same service – known as double charging.
The review unveiled the fact that agents have been charging large sums for simple services, such as reference checks and alterations on contract extensions.
An example of this has been put into practice by a South London letting agent who charged landlords £670 for a basic contract extension involving a date alteration, while the tenant was charged £90 for the same service.
The research also found large variations in fees, with landlords paying between 5% and 17% of the rent received – making the average 11%. Furthermore, the cost of a completed inventory ranged from £65 to £300, whilst property visit fees spanned £20 to £100.
This is the very thing that Rentify was created to prevent, with the cost and time benefits provided by modern technology, there’s no need for the private rental sector to be so expensive. Furthermore, with none of our services being paid for by the tenant, there is no risk of Rentify charging twice for the same thing.
Jasvinder Gakhal at Direct Line for Business highlighted the importance of taking into account agents’ fees, taxes and unbudgeted costs (such as emergency property repairs) as these costs combined are likely to result in landlords paying out expenses of up to 25% of their annual (rental) property income.
In an attempt to resolve the issue, the government is working on making all letting agents and property management companies join one of three approved compensation schemes in the coming months. The schemes would then allow investigations to take place following complaints voiced about hidden fees and poor service.
However, despite this, the government has decided against formal regulation of letting agents. Consequently, this decision has been followed by a large level of controversy given that complaints regarding their conduct have soared in recent years as more people are forced into renting as a result of rising house prices.
On another note, the insurer also discovered that annual landlord revenue has reached £32bn in England, with London landlords collecting the largest proportion of private rental income nationwide at £14bn per year – more than the North East, East Midlands, West Midlands, Yorkshire and East Anglia combined. With the exception of London, tenants in Leeds paid out the highest level of annual rent, with private rent reaching a total of £565m, followed by Birmingham at £521m and Manchester at £401m.
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