Agents’ fees increasing above the board

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    Agents’ fees increasing above the board

    I rent a 3 bed flat to students via agents, fully managed. They take 11%. Just had the email saying that due to changes in the legislation they are passing their lost fees on to me. Specifically: letting fee £350 plus VAT, tenant referencing fee £50 +VAT per student. Inventory and check in £200+ VAT, deposit registration fee £30+ VAT. Check out £200 plus VAT. Renewal ( which doesn’t usually apply with my tenants) £75 plus VAT per tenant. I make that £1080. More than one months rent. Is this standard? I understand they are clawing back the money they can’t make out of the tenants anymore. Is this practice standard or are they being extra greedy?
    Oh and I also pay them £30 pcm for a rent guarantee.
    What would be the best way to cut costs? I’m thinking of doing the check in and check out inventories myself. And maybe upgrading my landlords insurance so it covers rent default, which would cost less than £30 pcm.
    Any other suggestions? Thank you landlords!

    #2
    If you have the time and inclination you can totally DIY it without an agent.
    You will need to do some research/learning to ensure that you are doing everything right, but arguably you should be doing this anyway to ensure the agent is doing things correctly (some dont, and the Landlord can end up liable for agents mistakes).

    Next tenant changes we are moving to no deposit, just increasing rent to cover it.
    Credit check/tenant check is inexpensive, but is really just the start of the research you should be doing on prospective tenants.

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      #3
      Agents made money by charging fees to (potential) tenants
      Some of them got too greedy and so the law was changed to stop them

      They are stll greedy and so want the LL to pay

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        #4
        Some agents were greedy, particularly in London, but not many letting/estate agents make a lot of profit,
        so the lost revenue has to come from somewhere, otherwise, the agencies will cease to exist.

        The Tenant Fees Act had very little to do with curtailing greed and a lot to do with doing something to appear renter-friendly without actually doing anything or costing anything at all - with the affected group being widely despised by the public.

        No one made any effort to consider what effect it might have on the profits of agents, or the inevitable passing on of the cost to landlords on the supply of properties for rent.
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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          #5
          Thanks everyone. As I work and the property is not in the same city I live in, I have found it more sensible to use an agent. However with this sort of price hike I’m having to re think. I’ve been a landlord for 6 years and obviously have experienced the steep learning curve. I’ve educated myself to a certain level but there’s always more to learn. Whether it’s greed or just the will to survive economically I don’t know but I’d like to jettison as many agent fees as possible. Thanks Sam_cat for your encouragement. Any mileage in trying too haggle a reduction in fees? ( I wonder whether they expect that) or would you recommend just getting on with it and doing as much of the groundwork of setting up a tenancy as possible?

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            #6
            Above what board?

            I pay roughly half what you paid - student house: At the annual Artful/Agent lunch (I pay) I said in view of the new law I'd understand if their % went up: And was told thank you but know. Now worried they'll go bust.

            Write back saying due to changes in government your agree % is dropping to 9%.

            See how they like that & what response you get!
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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              #7
              I think passing costs to landlords was considered. The legislation moves the cost from a market with no power to influence prices to one that can. The tenant really had no choice to pay, but, as implied by the original posting, the landlords does have that choice.

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                #8
                theartfullodger yes my title was clumsy. I guess it should have been across the board, they are charging me for everything they used to charge the tenants. What with Hmrc, 11% fee and now this it’s just more erosion into my income . Would I be in a better negotiating position just starting afresh with a new agent?

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                  #9
                  I'd be voting with my feet, if the agent wants to set a pricing structure that's is way above other agents in your area,it's then it's time to move.

                  I'm paying around £650 to market, show, and agree rental etc. Then a monthly 7.2% fully managed. With an admin fee of 10% on any maintenance.

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                    #10
                    Thanks Russ. I think I will one up some meetings with the agents’ competitors in the new year. I’ll just let them know that when I email them back. Might make them think...

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                      #11
                      “ I will line up!”

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                        #12
                        Russ, when you say you are paying 7% for fully managed, I take it that is with VAT on top?

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                          #13
                          With margins being squeezed, I would defo recommend playing agents against each other to get a lower price. Most letting agents (all should be!) now display their fees on their site so you don't have to bother talking to different agents, just find their fees on their site (although some of the sites do make it difficult to actually locate the fees!)

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                            #14
                            Lots on 7.2% is inclusive of VAT

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                              #15
                              Thanks everyone. Russ you are getting a good deal. After sending agents an email saying I wasn’t happy with the extra charges and would be looking around for a better deal, I got an email offering me 10% plus VAT instead of 11% plus VAT. Not that enticing. Thanks Raj, indeed some of the local agents have their fees on the website. I’ll carry on looking for a better deal.

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