PropTech lettings company, Hello Neighbour, claims that landlords renting property through high street letting agents are ‘wasting’ up to £1bn a year paying unfair renewal fees, and wants to see such fees banned.
While renewal fees vary, Hello Neighbour claims that the average is approximately 8.5% (incl. VAT), which means landlords are handing over an additional £2,550 to letting agents for their current tenants to simply renew – “literally money for nothing,” said a company spokesperson.
“That is just for the second year,” the spokesperson added. “If a landlord is lucky enough to keep the tenant for a third year the cost just keeps adding up.”
EYE has asked Hello Neighbour to provide the source for this data.
But it is not just renewal fees that incur ‘unfair’ costs, according to Hello Neighbour. The company also claims that letting agents are increasingly encouraging 18-month or two-year tenancy agreements at the outset to provide long-term security for the landlord and to help the tenant to “beat the queue”, which means higher upfront fees.
Again, EYE has asked Hello Neighbour to provide the research to support this claim.
To combat these fees, Hello Neighbour has Friday launched its “Stop Renewal Fees” campaign to supposedly ‘educate the market and equip landlords with the questions they should be asking their agent so they understand what they are signing up to’
Hello Neighbour is encouraging landlords across the UK to sign up to the campaign here and pledge their support to stop renewal fees for good.
Phil Shelley, chairman of Hello Neighbour, said: “For too long, high street agents have taken advantage of landlords by charging fees for things that just aren’t fair – especially renewal fees. It’s crazy to think that landlords are handing over this kind of money every time their tenants simply choose to stay in their home for another year.
“Punishing landlords for having a great property that people want to remain in is just absurd. 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 today we are launching our “Stop Renewals Fee” campaign to educate landlords and let them know there is a better way so we can change lettings for good.”
