Hello Neighbour is urging the government to ban excessive letting agent fees, a practice that it claims costs landlords more than £2bn annually in London alone and contributes to rising rents for tenants.
In letters addressed to deputy prime minister Angela Rayner and housing minister Matthew Pennycook, the company says that letting agents routinely charge landlords up to 20% of the annual rent, with fees that often escalate as rents increase.
The PropTech firm claims that even more concerning is the widespread use of restrictive contracts by some of the UK’s largest letting agents. These agreements, it says, lock landlords into long-term commitments with hefty exit penalties and lengthy notice periods; stifling competition, discouraging investment, and worsening the UK’s rental supply crisis.
The company is calling on ministers to ban ‘punitive’ exit fees and ‘unreasonable notice clauses’ alongside the broader rental market reforms proposed in the government’s Renters’ Rights Bill. Hello Neighbour believes these straightforward changes could significantly ease the housing shortage and lower costs for both landlords and tenants.
Richard Jenkins, co-founder and CEO of Hello Neighbour, said: “We believe these proportionate changes would enable the residential letting market to modernise, remain competitive, and hold firms to greater account. By accommodating these reforms in the Renters’ Rights Bill or through other relevant measures, government can unlock a fairer, more dynamic rental market that benefits tenants, landlords, and the wider economy.
“Our own research shows that when landlords reduce unnecessary costs, many reinvest those savings into improving their properties or expanding their portfolios — delivering direct benefits for tenants in the form of either rental reductions or lower annual increases, as well as helping to meet national housing goals.”
