Letting agents are often criticised for a lack of transparency in the fees that they charge. A recent debate started by Bushells highlighted the issue as a source of major frustration for both Landlords and Tenants who often feel that an agent isn’t transparent with the fees or costs applied for managing a tenancy. They called for agents to reveal their fees in the same way that Lenders already do with Actual Percentage Rates (APR’s).
The concept proposed is that agents would have to display their actual costs in relation to an illustrated example in order that the Landlord is fully aware of any fees that are due over and above the quoted percentage commission.
Northwood’s Managing Director Nick Cooper commented “we endorse the idea of having greater transparency of fees associated with renting out a property.
“One of the reasons that our Platinum Guaranteed Rent scheme is so popular is that there are absolutely no set up fees, no tenant introduction fees, no commissions and absolutely no hidden fees charged. The annual rental income offered is also paid regardless of whether the property is empty or the tenant has stopped paying, so Landlords can calculate with confidence their potential annual income.
A real-life example that was used to prompt the debate was based on a traditional 12 -month let-only tenancy, extended for one year with a monthly rent of £1300:
A.N. Other agencyCommission £1,560 Additional Fees Admin fees £500 References £100 Extension £1560 Tenants fee £250 Debit card fee £30 Total £4000
Based on the above, what appears upfront to be a 10% commission, in fact becomes nearly 13% when applied across the full two year period. An interesting set of statistics for Landlord’s considering a “cheaper” option . . .