Three Countrywide brands, two Connells Group brands and haart have been named as being among the most expensive 20 biggest firms for charging tenants’ fees.
Bridgfords comes in at the dearest, charging a total of £1,442, followed by Bairstow Eves charging £1,101.
Next comes haart, charging a total of £1,036.80, and then Hamptons, with a total of £1,010.80.
However, the most expensive agent of all, according to the Sun newspaper, is Kinleigh Folkard & Hayward (KFH) – the smallest of the 20 biggest agents in the UK that it looked at.
The word ‘biggest’ was measured by the number of properties available per agency brand last October.
Included in KFH charges are £360 to set up a tenancy and £300 to renew it.
Foxtons comes in eighth place in the list after cutting its tenancy set-up fee from £420 to £250 per person.
All the figures, calculated for the Sun by Generation Rent, are for one tenant.
Generation Rent has also estimated that renters will spend £153.9m on fees between now and when the ban comes into force on June 1. For this exercise, it based its calculations on two adults paying £404 in fees when moving in, £117 in renewals, and £121 on check-out fees.
It also used English Housing Survey figures of almost 4.7m private rental households, with 25% moving home in 2016/17.
The Sun’s story is slightly confusing: although it names Kinleigh Folkard & Hayward as the most expensive, it uses different charts.
According to the second one, KFH is more expensive than the Countrywide brands of Bridgfords and Bairstow Eves, but at £1,328, KFH is cheaper than the £1,442 earned by Bridgfords according to the first chart in which KFH does not appear.
However, as the Sun itself points out, the whole business of tenant fees is “complex and confusing”.
The Sun also says that another London firm, Ludlow Thompson, would have been named the most expensive in terms of tenant fees if it had had more properties listed when it did the research.
According to the Sun, it charges a £420 admin fee.
The Sun’s data also shows some gaps – for example, it says that Bridgfords, Bairstow Eves, haart and Hamptons show no listed fee for check-outs, while KFH, haart and Savills (sixth in the chart) do not list a fee for late payment. Neither Hamptons nor Foxtons lists a fee for a guarantor, while Foxtons also does not show a fee for an inventory.
Three firms – William H Brown, Savills and Connells – do not show a fee for a landlord reference.
In fifth and seventh place are Connells Group brands William H Brown and Connells itself, with total fees of £996 and £954 respectively.
In a separate newspaper article, Phil Spencer claims that tenants will save an average £272 when the ban comes in. He says it is “just a shame” that it has taken so long for the ban to come into force. He also describes the fees as a “crucial revenue stream” for agents.
In another move, Citizens Advice said it helped 59,000 private tenants during the last year. The issues included 2,100 problems with letting agent fees and 3,400 problems with advance rent and deposit. Chief executive Gillian Guy called for the deposit to be reduced from five weeks to four.
https://www.thesun.co.uk/money/8215392/letting-fees-ban-tenant-renters-154m-june/
https://www.theguardian.com/money/2019/jan/26/letting-fees-ban-tenants-renters-phil-spencer
Comments (21)
RM will take the biggest hit when agents drop lettings to save money, OTM and Z are the best at the moment for lettings and many agents know this, Landlords aren’t bothering where you advertise as long as you get the property let, on the other hand Vendors expect to be on RM, so will RM be the portal for sales and the other two for lettings, it’s going to be interesting.
This just adds further fuel – the papers will present this as “rip off agents” when in reality it’s a few doing the ripping that’s ruined it for the rest of us.
There’s nothing wrong with making a reasonable charge for doing a reasonable job. Looking a those inflated figures, though, and it’s no wonder it’s been banned.
It’s survival of the fittest, now.
We have charged a fee of £375 plus vat per property and nothing else, it covered everything for the lifetime of the tenancy. Not a single complaint about fees in 10 years. Looking at some of the fees listed in this article is it any wonder fees are being banned. I know of one local competitor who will lose £80k in lease renewal fees alone. The fact is our industry is responsible for the ban, £1000 plus in fees to tenants is taking the p***.
We’re 250 plus VAT for the lifetime of the tenancy and have made some simple adjustments to be in the same position on the 1st June as we are now.
Those that took the Michael are going to be hit hard and those that do HMO/Students will not be able to claw that annual income back IMO.
I actually do not find a lot of these fees unfair. Agents were made made to be transparent by displaying their fees, from what I have seen it is only the medium/larger firms out there in most cases that have done that.
Only working on a small demographic of smaller agents i have seen, some are charging the tenants more than their landlords in cases, these are the agents that will fall by the way side first.
As mentioned above as well, it seems on this research that they have literally added every fee together. I think there is an argument for the Tenancy agreement fees being excessive in some of these cases but a lot work goes into the references, guarantors, even changing sharers, etc
We welcome the fee ban. Some of those charges are day light robbery.
There should only be one party paying your fee, which is your client.
Now we know which companies are responsible for excessive charges that caused the fee ban. And what do our dictatorial conservatives want? the small guy out and the large companies running the show. Jobs for the boys on the pretense of professionalism.
Agree, althought the worst company IMHO, did not appear in the article Romans/Leaders
Absolutely agree Will. Those eye watering fees make ours look like peanuts! Although I don’t agree it’s just the Conservatives. Maybe the newspapers should have highlighted these firms before now. In fact maybe they should highlight their complaints record now too. You never know they might see some value in the small businesses after all.
What people are missing is the fees ban is not increasing supply, it is merely reducing the cost for those who secure a tenancy.
Increased regulation and less favourable taxation are driving some landlords out of the sector but the reduction of supply is forcing rents up so what might be a short term reduction in yield will inevitably produce a long term increased yield.
The economists have legislated themselves into a low interest rate, catch 22, corner; low interest rates mean invested cash and pensions are performing poorly while self managed property pensions are enjoying capital appreciation and inevitable yield inflation. Genius! Get out of that without sticking interest rates up and making things a whole lot worse.
Interesting Robert, another article on PIE says rents have decreased for the first time in 10 years, and from my visits to clients, quite are few are saying tenants are harder to come by.
Are you suggesting the housing crisis is over? The supply of rented property is equal to or greater than the number of tenants and all those who want to buy property can?
I think the short term economic uncertainty over the fate of the country might be the cause of what is happening right now.
Prices locally to me are up 5.7%, rents are up 8.3%
just saying what I see…
you know facts from the DPS index, which is a pretty good guide, and my own experience…
there will always be a shortage of housing, if you have a population growing faster than you build.
and all of that is compounded by low interest rate which artificially inflate the price of assets such as property beyond what they are ordinarily worth
If Carney had increased interest rates when he said he would perhaps we would have had an economic crisis but at least it wouldn’t be the what I suspect we are facing right now; the same economic woes of increasing interest rates but this time round he might not be in control of when and by how much.
We are currently experiencing asking prices being reduced, in most instances because the original prices were on the bullish side and landlords need to see that the market has changed; a temporary blip I suspect. Conversely we are seeing existing tenants being clobbered at renewal/anniversary by landlords many of whom would previously have not increased rent to existing tenants but now feel that they have to to maintain the status quo after gov have tinkered with their businesses. 2 landlords today 1 @ £35 PCM the other at £50 PCM as increments meaning that their tenants are paying £420 and £600 a year more in increased rents, way above any fees that they would have paid. We as agents will see just over £100 of that increase, slightly below fees that a tenant would have paid us but if they stay on for 3 – 4 years…..
Some huge black holes to fill here. 20000 new tenancies each year, average of 1.5 tenants and a fee of £1000.00 per tenant leaves a loss of income around £30,000,000.00 and some of these firms will complete far more than 20000 new tenancies each year. The corporates already tend to charge the landlords more than independents, so it will be very difficult to recover this revenue from landlords. The perfect storm is brewing…….. nimble independents have a real opportunity as the huge organisations figure out how to survive.
Fair fee level David, but just two points?
Point one, I have never seen a military admin fee before, but appreciate it maybe just similar to a company let. Is there a reason it is more expensive than a normal let?
Point two, I see the non refundable statement as part of the holding deposit, which is quite common. It maybe become more of an issue when the tenant fee ban comes in because a holding deposit will be more in the spotlight. However, I would argue that having the words non refundable are unfair. Firstly, you can only deduct fair and reasonable costs incurred, which may not be the whole of the holding deposit i.e. if the applicant pulls out 2 hours after giving you a holding deposit, what loss have you suffered? On the unsuccessful referencing, what is the definition? If they do not meet your referencing criteria, then that is not unsuccessful, because you could set that referencing criteria so high, that every single applicant fails. You can only deduct, where you can prove that they misled, lied or withheld information, which if you were aware of prior, then you would have never accepted the application.
Military in our area is US Forces Personnel so overseas checks.
The ‘non-refundable’ statement has always been there to discourage people who have been economical with the truth from chancing an application. Whats the loss if they pull out just after applying? The landlord we’re acting for might have something to say about that! I agree with your last sentence.
Here’s our current fee structure: Administration Fee – Due at point of application One person (18+ years) £154.17 +VAT £185.00 Each additional person £62.50 +VAT £ 75.00 Military application £229.17 +VAT £275.00 Each additional person £62.50 +VAT £ 75.00 Guarantor £62.50 +VAT £ 75.00 Company let £229.17 +VAT £275.00 Pet Charge – If agreed by landlord, a one off charge at the beginning of the tenancy: Dog or Cat (each) £200.00 More than one pet On Application Holding fee – all applications £150.00 (to be paid with application and is non refundable if prospective tenant pulls out, or referencing is unsuccessful otherwise deducted from dilapidation deposit at start of tenancy) Serious rip off? Compare that with the corporates / top 20. If they know who is overcharging why impose the legislation as a blanket ban? Why not impose a maximum fee?
Shame the so called ‘high end’ agents & corporate’s have been ripping off tenants so badly to instigate this ban. Seems harsh on small indendents who’ve historically charge a ‘fair’ fee for what is a service with a genuine cost!
If the average saving is £272 it just demonstrates how bad practices have become!
Sadly I expect a lot of people will lose their jobs once the impact of the ban kicks in but all the tenancy admin, contracts & referrencing will still need to be completed!
Good idea to reduce deposits to barely anything! After all tenants are always really respectful of landlord’s properties and genuinely leave them in a better condition than when they found them! That idea, at least, will give the small claims court some more business!
£1442 for Bridgfords?
They seem to have added every single fee possible, to even include a company let fee, which is not applicable to a single person.
If they applied this calculation method to Foxtons, then it would have been more than £250 (around £900)
without going through every single company and actually working out the relevant fee applicable, then this is a pointless list.