What do Lettings agents Really Charge?

Jan. 17, 2012 - PRLog -- There was the Foxtons case where costs had to be flagged as core terms of business. As we head towards the opening of our office in Docklands, I have been looking at agents terms of business and I am frankly appalled and shocked

I think agents should display some sort of APR based upon a 12 month let with a one year extension. That way landlords would have a true cost comparison.

Assuming most agents charge roughly the same for let only, rent collection management etc, you would think it a reasonably level playing field for landlords to gauge costs. It is not.

Our only additional costs are reduced renewal fees where the extension is arranged by us. £260 + VAT admin fee split between landlord and tenant. Ref fee £30 + vat per tenant, tenants pay cost for Credit Card and nothing for using their Debit Card

One firm as a comparison charges:

•   Extension fees at same rate as for initial term whether they extend or not!!
•   £500 + vat admin fee split between LL and tenant
•   £250 admin fee to tenant for extension
•   10% ‘supervision’ fee to landlord for all works over £500
•   1.5% if the property is sold whether agent is involved or not !!
•   £50 + ref admin fee
•   3% credit card fee, 1% debit card fee.

So, here is a good comparison for you. Imagine being a Landlord “What do you charge for a let only” – “10% – oh, that’s standard.” - Really?

Lets look at the real cost example below.......

Based upon a 12 month let only AST to a couple – extended for one year – move in paid by debit card. Rent £300pw and assuming no works done. (excludes VAT)

Bushells:

Commission:      £1560
Admin fees:       £260
Refs:                      £60
LL Extension:      £780
Tenants Fee:      £0
Debit Card Fee: £0

Total:                     £2660.00

A.N Other agency

Commission:      £1560
Admin Fees:       £500
Refs:                      £100
Extension:           £1560
Tenants Fee:      £250
Debit Card Fee: £30

Total:                     £4000.00

Add in say a £2000 boiler, A.N.Other agency gets another £200 from landlord and some even receive a commission from the contractor!

So, on this basis, one agents actually earns nearly 13% of the rent the received, we charge 8.5%.

In other words, whilst both agents claim to charge the same when an enquiry is made, one in real terms is charging about 50% more than the other. Shocking?

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Bushells is one of London's leading Estate Agents. Founded in 1937, we are one of the most successful estate agents in London. We are members of all recognised industry bodies including ARLA, TPO and NAEA.