Silly letting agents fees

rev_henry

Starting to vaguely look for a flat for myself and partner for next year (well actually I mean academic year, so mid August ish) and have been staggered by the agency fees being requested. I mean, between £100-400 for very little, which I simply will not pay. Is this normal? Struggling to find any that are direct with a friendly landlord kinda thing.

Only paid something like this once a couple of years ago, and it was very much at the lower end of the scale and it was our first time renting so we didn't really know what we were doing.

Is it that I am no longer looking at student orientated properties? Or is it the type of property I'm looking at (I quite fancy those newish purpose built looking flats, around Salford Quays for example but I'm sure they're the same in most cities)?

Which brings me onto another thing, will they be twitchy about me being a student (albeit married and in my final year)? Other half isn't a student.

Also, am I likely to get anywhere saying 'I'm not paying any of your silly fees but give me 5% off the rent and I'll pay the lot upfront'?

I know I should be asking these questions of agents but just trying to gauge the market here...

rev_henry

Anyone??..

k0sh

Are you a mature student? Normally landlords do not like regular students. If your other half is earning enough to pass the referincing then it may not matter.

Lettings agents will charge what the market will stand. You are paying for their specialist knowledge and overheads, not just "for a few minutes of work".

rev_henry

k0sh wrote: »

Are you a mature student? Normally landlords do not like regular students. If your other half is earning enough to pass the referincing then it may not matter.

Lettings agents will charge what the market will stand. You are paying for their specialist knowledge and overheads, not just "for a few minutes of work".

No, but I could quite legitimately simply say 'I'm doing a masters'. Don't understand why they need to check our earnings if I offer to pay upfront? Though obviously I'd rather not.

I would argue that that is what the landlord should be paying for!

colsey

For our first flat we paid £200 for credit checks ect at the beginning of our tenancy and then £144 at the end of the tenancy for a checking out fee. I think these fees are quite normal if you are going through a letting agent. Maybe if you try and go straight to landlords doing it all themselves there wont be as much fees and probably cheaper rent

thelem

rev_henry wrote: »

Also, am I likely to get anywhere saying 'I'm not paying any of your silly fees but give me 5% off the rent and I'll pay the lot upfront'?

Very unlikely - the fees go to the agency, but up front rent benefits the landlord. Gumtree.co.uk and findaflat.com are quite good for finding private lets.

RupertTheCat

I am a landlord with a couple of properties in Manchester, and I get charged a month's rent plus VAT by letting agents - that's without even doing an inventory as I do that myself. I don't have a clue what they charge the tenants, but they're obviously making a bit out of it. £100 doesn't sound too bad for the tenant, £400 sounds over the top. Shop around - some estate agents are way cheaper, but do NOT use Belvoir in central Manchester. Nightmare.

The only way to avoid "silly fees" is Gumtree really.

Out,_Vile_Jelly

k0sh wrote: »

Lettings agents will charge what the market will stand. You are paying for their specialist knowledge and overheads, not just "for a few minutes of work".

"Specialist knowledge"? Most letting agents are school leavers with no qualifications, formal training, or knowledge of housing law.

OP- do you receive a bursary? If so, evidence of that suffices as proof of income for most LLs. Remember if there is a non-student occupant of a property, you will be liable for Council Tax.

k0sh

Out,_Vile_Jelly wrote: »

"Specialist knowledge"? Most letting agents are school leavers with no qualifications, formal training, or knowledge of housing law.

Prove your statement. It is just rubbish.

princeofpounds

Lots of agents charge eye-watering fees for tenants these days.

Put simply, they do it because they can.

Certain types of market structures give middlemen power to extract far more money from the transaction than is 'justified' (if we should ever have a concept of morality in economic matters).

Rental housing is one such market. Although it gives the appearance of being largely free, it suffers from being illiquid (meaning people don't move houses very often) and heterogeneous (meaning each property is very different to the next).

This leaves it vulnerable to oligopolistic pricing, which basically means high prices can be charged that seems unjustifiable.

It's easier to explain in the form of an example. If you are given notice on your rental home, you have only 8 weeks to find a new place. You are likely to be heavily constrained in location by things like work, schools and transport. Sometimes even to a few streets.

This means that over that 8 week period, there may be only a couple of houses that work for you on the market. And both of thoses might be with the same agent.

That's a de facto monopoly, although more commonly there might be an oligopolistic situation where there are other choices but they are deeply unappealing. Compromise is always possible to a degree, but substitution is not easy; you cannot for example swap a 3 bed for a 4 bed or vice versa due to budgets and space requirements.

So when an agent makes a demand for fees, often you are effectively 'forced' to pay it without having any competitive alternative.

Hence the high fees levels that creep in.

The further piece of market structure that causes the problem is the lack of transparency. Every £ that comes out of an accommodation budget in fees is one less £ that goes to the landlord. And yet so often a landlord will not be told and will not think to ask what the agent charges tenants, thinking only about their own direct costs.

Having said all that, you should not expect charges to relate directly to the costs involved in your specific transaction. Prices are not set at direct costs + a bit, it doesn't work that way.

Now, how to solve the situation? Well, I am not a statist who believes in excessive regulation - it is often costly and leads to unintended consequences. I am very pro free-markets, but I understand that not all markets are born equal and some are better and some are worse at operating freely and fairly. This is simply due to the nature of the good or service being provided and the producers and consumers involved.

I think one thing that could be done is to make it clear that LAs work only for the LLs and can charge only the LLs. Another possibility is to permit only charges that are clearly displayed to the landlord (so the LL can see the REAL economic cost of the LA being involved in the transaction).

But that's a discussion for politicians....

dimbo61

We own several properties in the manchester student areas ie Fallowfield and Victoria park. Everything from 10 bedroom HMO,s to 1/2 bedroom flats
We do not use letting agents and we do use Manchester Student Homes who operate a landlord accreditation scheme !!!!
The good guys !
Check it out