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High street agents making 473% profit on some lettings fees, says OpenRent

UK's largest letting agent by number of properties let says average industry fees charged to tenants remain "unfair"

Nigel Lewis

The profits generated from the lettings fees charged by high street agencies remain unfair despite the looming ban to be introduced during the next parliament.

That is the claim made by the UK’s largest letting agency brand, online-only operator OpenRent, which says it is now the biggest in the market at 50,000+ properties let a year, up from 25,000 two years ago.

This, OpenRent says, makes it larger than competitors LSL at 35,000 rentals, Foxtons at 20,000 or Haart at 5,000. It also claims to have a ‘time to rent’ of seven days.

Referencing cost

The South London-based online agency says the real cost of referencing a tenant is £15 and yet recent government research indicates an average industry cost to tenants of £86.

It also reveals that the average cost of setting up a guarantor is £95, while the real cost is also £15. And the average cost of a tenancy renewal is £85 but OpeRent, using a calculated cost based on it taking ten minutes to check a renewal contract and an average negotiator salary of £20,000, £4 to renew.

Using the same hourly calculation of staff cost, OpeRent says it costs high street agents between £4 and £12 to amend a tenancy compared to an average fee of £115.

“The Association of Residential Letting Agents argues that the letting fee ban will be bad for business and lead to thousands of job cuts, but we know that banning fees is only good for business,” says OpenRent spokesperson Sam Hurst (pictured, left).

“We have created a business model whose success doesn’t depend on exploitative fees to tenants and has allowed us to become the largest letting agent in the UK in just a few years.”

OpenRent was launched in 2012 by two Oxford graduates, Darius Bradbury and Adam Hyslop (pictured, right) after, they say, experiencing difficulties renting property.

Earlier this year it picked up funding worth £4.4 million from venture capital firm Global Founders Capital, and US blog TechCrunch recently described OpeRent as a “pile ‘em high, sell ‘em cheap’ operator along with uPad.

 

June 27, 2017

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