Lettings firm blames competitors’ renewal fees for rent rises
Two in three landlords in London have hiked rents to pay for their agent's renewal fees, saying tenants end up paying 13 months’ rent a year, says Hello Neighbour.
Lettings platform Hello Neighbour is attempting to ‘do a Purplebricks’ and has once more attacked its traditional competitors for charging renewal fees that ‘take advantage of landlords’, claiming the fees are one reason rents are rising for tenants.
Some 65% of landlords in the Capital told Hello Neighbour that they had hiked rents due to renewal fees from letting agents – meaning tenants who stay in their property for more than a year are paying thirteen months’ rent a year.
EXTRA MONTH’S RENT
With the average London rent at around £2,500 a month and the average renewal fee at 8%, landlords are typically paying £2,550. If that gets passed on to the tenant, then they are effectively paying an extra month’s rent to stay in the same property – just to account for the renewal fee.
For tenants who only sign a one-year agreement, the landlord renewal fee recurs every time they sign up for another year. And with specific clauses in tenancy agreements that incur an annual renewal fee for as long as the tenant remains in the property, the cost just keeps adding up, with the tenant potentially paying the price.
Hello Neighbour was founded in 2018 to combat the lack of transparency and fairness for tenants and landlords in the UK rental sector.
It doesn’t charge renewal fees, and only bills a one-off fixed fee to the landlord of £890 (including VAT) with no additional costs to find and move in a tenant – saving landlords up to 73% of fees compared to traditional high street letting agents, it claims.
Phil Shelley, Chairman of Hello Neighbour, told The Neg: “For too long, high street agents have taken advantage of the rental market by charging fees for things that just aren’t fair – especially renewal fees.”
PASSED ON
He adds: “Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them.
“So in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.
“We are determined to put a stop to this and that’s why we have relaunched our ‘Stop Renewals Fee’ campaign to educate landlords and tenants and let them know there is a better way, so we can change lettings for good.”
The Neg revealed last October how Hello Neighbour had launched its campaign to stop landlords who rent property through high street letting agents ‘wasting up to £1 billion a year’ paying ‘unfair renewal fees’.
Now over 550 London landlords have already signed the petition HERE.
Landlords will charge as much rent as the market dictates or will allow, whatever their cost base. Equally when a landlords costs decrease they do not in turn decrease the rent, they are investors looking to maximise their ROI. Is hello neighbour therefore suggesting as they dont charge renewal fees their rents are lower than their competitors? How do their landlords feel about that, knowing there property is commandigng less than other similiar properties?
Ive not seen any evidence of agents fees driving rent increases.
Its almost 100% being driven by high demand due to the UKs population crises and rising interest rates. Landlords are simply trying to cover their mortgage costs.
Net migration 700,000 a year.
Mortgage rates for buy to let 5%+.
Simples