A London estate agent has labelled letting agents’ administration and contract fees charged to tenants as ‘indefensible and morally reprehensible’ and says that is why his company doesn’t charge them.

The comments came in an opinion piece written for North London newspaper the Ham&High by Simon Gerrard of 13-branch sales and letting agent Martyn Gerrard, which bills itself as the agent ‘where integrity counts’.

“There are only two reasons why agents charge the fees. Some cut their fees to landlords to attract stock and then simply charge hazily explained admin fees to the tenants to make up the shortfall,” he says.

“Alternatively, and even worse, some agents still charge the landlord the full fee and then also charge the tenants.

“Either way it is estimated that a ban of these tenant fees will wipe 10-20 per cent off the turnover of agents who have been charging these spurious fees to tenants. Although this may result in fewer cut price unregulated agents, which is no bad thing, the unintended consequence is that tenants will ultimately be worse off.”

Martyn Gerrard, which was established in 1964, does charge tenants a fee, albeit a much lower one than the government’s £233 national average, and a lot lower than many London letting agents, Simon says.

Tenants are charged a single £100 for referencing, contract negotiation, right to rent checks and the fee includes one Guarantor referencing check, although the company charges £100 if a further guarantor is required.

“My concern is that if all the costs are to be borne by the landlord, there will be letting agents who will try to compete for business by cutting their fees,” he says.

“This will inevitably mean a lower quality service, fewer tenant checks and landlords left dangerously exposed.”

Read the Ham&High article in full here.