Renting - Fees?

mattyh

We're renting for the first time (just in between moving houses!) and we were only after a 3 month minimum let rather than 6, but we've managed to get an offer for a suitable property from a local letting agent, however I'm slightly confused by some extra fees...

They're charging 1 months rent as deposit (standard), and by their own admission they have increased the monthly rent price by quite a bit 'to cover the fact it's only a 3 month let'. However, they're also quoting £110 'landlords relet fee' and £94 'tenancy application fee'. What on earth are these and what do they pay for?

BobProperty

I don't think you can have a tenancy for 3 months. It's 6 months or it's not an Assured Shorthold Tenancy. They are trying to get some extra money out of you because they will be re-letting the place in 3 months. I really don't understand why some letting agents try these sorts of things. I think it reasonable to pay something up front for credit checks and the initial admin but there are some real P takes at times.

rosysparkle

The normal deposit, even on a holiday let (which is what a three month let is) is the equivalent of six weeks rent.

I don't know what the landlords relet fee is, as the lettings agent for which I work don't charge this, you'll have to ask the agent why they are charging this.

The tenancy application fee covers taking up credit references on you and drawing up the agreement. £94 is on the cheap side of average. The average in the city where I work is around £125 for a single application and £175 for a joint application, some agents split this into two, part paid on application and part on signing the agreement (so it initially seems as if you pay less).

BobProperty

3 months stuffs it as a holiday let tax wise, doesn't it? Why is the landlord doing this?

rosysparkle

My guess is the agent has put the proposition of a three month let at a higher rent to the landlord, and the landlord has agreed rather than hang on for a six month let.

Mattyh, are you sure your new property will be ready in three months? If it's delayed or your purchase falls through, you will be left with trying to extend the holiday let at a higher rent than if you'd taken out a six month AST with a break clause.

mattyh

I kinda imagined the fees would be a way of getting some extra cash out of me...!

I would say the rent is about 15% above what it should be for a standard let, so i'm very concious i'm being penalised twice here!

Note that the property in question is about three doors down from the property being built (both brand new on the same development) and our name was put to them by the builder themselves.

We do have an estimated complete date of October, and by all accounts this is a pretty reputable housebuilder (as housebuilders go!) and tend not to fall back (though there's no guarantees of course). They are now on second fix on the new house.

You're quite right about weighing this up against a standard 6 month let (though not sure what you mean by AST with break clause?) which gives us these three options... 1) 6 month let 2) 3 month/holiday let 3) delaying the buyers of our current house a little longer...

rosysparkle

AST = assured shorthold tenancy. Has to be for an initial term of at least six months.

Break clause = clause in the agreement allowing either party to give notice (1 month for the tenant, two months for the landlord) before the expiry of the fixed term. Having a break clause in a 6 month agreement is rare, but it can be done by agreement.

If the builders are up to second fix, bearing in mind it's summer and the forecast is for good weather, hopefully you won't get delays