Overpriced Letting Agent Application Fees

A few years ago I wrote a blog post (feels shitting bizarre that I’ve been blogging for so long and I can refer to stuff I wrote years ago) about Letting Agents Charging Tenants An Admin Fee– perhaps some of you veterans remember it. My gripe was, I couldn’t quite understand WHY letting agents charged tenants an “admin fee” when they were already milking landlords. The landlord is the customer, not the tenant. So I made the point that it was unreasonable for lettings agents to charge tenants.

Obviously, due to the fact I was covering such a riveting topic, the blog post received quite a few responses, which included several letting agents justifying the reasoning for charging tenants an admin fee. Apparently the fee is imperative to cover the costs of referencing the prospective tenants. Fair enough, I say reluctantly, as long as the fee isn’t extortionate (because there’s no need for it to be. But I still think the landlord’s fees more than covers those expenses). Either way, as with all my awesome posts, fun was had by all during the discussion. So if you’re reading this while you’re in the midst of sinking into your chair during the working hours of your bullshit job, surrounded by your bullshit colleagues, and contemplating whether life is worth living, perhaps you’d like to catch-up by reading the blog post linked above; otherwise it’s probably not worth it because there’s better shit to do in this world, and I’ve covered the gist of it anyways.

So, yesterday evening I was having a gander on Facebook and reading through my community’s status updates. One of my friends was having a bitch about a letting agent that was charging a ridiculous amount for a tenant application fee. I found it quite amusing, especially the comments, so I thought I’d share.

Tenant Application Fees

Tenant Application Fee

Bless my friend. She’s not the most coherent creature you’ll ever encounter, but you get the gist of her amusing tantrum. The agent wanted £240 for an application fee. The agent justified the price by suggesting they provide the best credit checks and references in the business. I’m going to go out on a whim and call bullshit. I don’t care if their credit checks/references come with 22 carot ribbons attached around them; there’s no way £150 + VAT for references can be justified, nor a £50 + VAT fee for a credit check. They use a third party credit check company just like thousands of other agents use; and those other agents seem to manage ok by charging a more reasonable application fee.

Here’s a list of Tenant Credit Check Services For Landlords – you can get checks done for free via Discount letting, while the others charge an average of £7. If agents want to make a small profit for arranging the credit check, then fine, by all means put a cherry on top, but make it reasonable and justifiable.

I went onto the letting agent’s website (R&P Lettings) and looked under the “Tenant info” section”. This is what they said about “References”:

As a minimum we will require satisfactory references from your employer (or college), a previous or current landlord, and a credit reference report. We may also require a personal reference, and sometimes a guarantor. We may use the services of an independent referencing company to obtain and evaluate these references.

That couldn’t sound more standard to me. Nothing special about it. Calling it “the best” is false advertising. I think my Facebook friend said it best- what a “fat little twat.” Out of principle, I would simply refuse to use agents that chat rubbish and charge unfairly.

Firstly, in my opinion, the agent needs to lower their bullshit tenant application cost. Secondly (while I’m in the midst of a rage), they also need to put a sledge hammer through that ‘Krusty the clown’ website of theirs; it looks cheap, and doesn’t fit nicely with their extortionate rates. If you’re going to overcharge, at least have a nice website to show for it.

I just explained the concept of letting agents charging both landlords and tenants fees to a friend of mine while he was towering over me, enquiring what I was blogging about. After I explained, he laughed and said, “Letting agents are benefiting from a double-ended dildo” Never a truer word spoken. And I think that’s how I’m going to end this blog post. Double-ended Dildo.

UPDATE (12th Jan 2012) – I just received the following email:

Dear sir

In regards to your Blog in which personal abusive and threatening attacks have been made against a member of my staff, and my company R&P Lettings. I have passed this over to the Police and my solicitor, they will contact you directly. They will also be in touch with the young lady.

1) I haven’t done anything illegal – what will the police do? 2) No one has threatened anyone.

I’m assuming it’s a sick joke conjured up by a 12yr old.

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38 Comments- Join The Conversation...

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Andy Mills 11th January, 2012 @ 15:13

Does sound like bullshit to me as well. And your friend could learn the difference between they're, there and their .

However, such a high price could serve to help keep the riff-raff away.

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Andy Mills 11th January, 2012 @ 15:14

Before anyone says anything, the comment system cut out a bit about me being in a grammar Nazi mood. Or something.

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Armin 11th January, 2012 @ 15:24

LL, Photoshop fail. Her name is still discernible. You don't want to make it too easy, do you?

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NS1 11th January, 2012 @ 15:28

Is she fit? Shame you blurred the photo!

Complete bullshit from the agent. I wouldn't use the agent if I knew they would charge my Ts that

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The Landlord Avatar
The Landlord 11th January, 2012 @ 15:32

@Andy
The high fee could encourage riff-raff, with the intentions of fooling the agent to think they have money. Works both ways, I guess.

@Armin
Thanks for the heads up! I've further defaced the screenshot :)

@NS1
She's do'able. Tight little package.

Yeah, I agree, I wouldn't use an agent that charged tenants that much either! I find the price completely repelling.

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YesAdam 11th January, 2012 @ 20:02

That fee is a rip off for the tenant.

The fee is needed to check status of prospective tenant, last time I checked its £7 per person and addres.the experian offer she quotes is an introductory offer and only available to the person.

As you can see from fb status it obviously works to get rid of time wasters also.

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Jeremy 11th January, 2012 @ 20:23

I wonder if the agent is trying to take unfair advantage of it being a landlord's market at the moment. They hope surplus demand over supply of rental properties will lead to tenans paying anything just to get somewhere to live. A real vulture mentality if they are.

I'll confess I was naive with my choice of agent: I never thought to ask the tenant fee sructure. But as that forms part of the total cost to the tenant I'll be interested in that next time round.

After all, what sensible landlord would want to use R&P (I assume it's short for "References Pricey") if they are out of step? Any similar property is £150 cheaper to rent so the tenant chooses that one instead. Poor old R&P landlord sitting their with a big void period, wondering why it does not get let out.

A somewhat theoretical point: So the fee strucutre is disadvantaging the landlord for whom the letting firm is acting as their agent. And under law of agency the agent can't act against the interest of the principle.

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Jeremy 11th January, 2012 @ 20:28

@ Andy

You're right, it will keep the riff-raff away: But isn't that the point of the referencing?

It will also keep the well off away. They because well off by not wasting their money on overinflated "fees". Just the sort of tenant the landlord wants!

So the landlord's tenant market from P&R could become just the desperate and the stupid. What landlord wants stupid and deperate people living in their asset?

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Benji 11th January, 2012 @ 21:41

YEARS AGO??
It was only 2010, thats taking the p...oetic licence!

Still, its an improvement on some of last years shite, even if it is the same article re-hashed. Well done!

Just one constructive criticism, stop making up imaginary friends.

Youre a landlord, just 'cos youve credit checked them it doesnt make them your friend. Stalking is wrong- whatever its called.

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Clare 12th January, 2012 @ 15:53

I have used R & P Lettings, and found them to be an excellent letting agent. They are professional,and have let several of my properties. I have never had a void in any of my properties, which proves what a good job they do.
Their tenant charges are infact more reasonable than most of the larger agents. In my experience, if you want a good service it is well worth going to a reputable agent, and paying for it.
Keep up the excellent work R and P Lettings.

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Jason 12th January, 2012 @ 15:59

Why do people have to be so abusive on here??? Do they not realise it is an indication that they are not too bright, and have very limited vocabulary?

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YesAdam 12th January, 2012 @ 16:05

@Clare - Another letting agent here, the fee is extortionate compared to most of the larger or smaller agents. The top quality tenant referencing costs just only £23.50.

I can understand them taking a small fee on top of that, but not in excess of £200 more

You say reputable but its not a registered company and can not see any trade organisations they are registered too. In addition the agent office is a home address?

Not very reputable and very expensive.

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The Landlord Avatar
The Landlord 12th January, 2012 @ 16:24

Clare, it's sounds like you work for R & P Lettings :)

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NS1 12th January, 2012 @ 16:27

@landlord agree!!

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The Landlord Avatar
The Landlord 12th January, 2012 @ 17:24

I just received this email:

"Dear sir

In regards to your Blog in which personal abusive and threatening attacks have been made against a member of my staff, and my company R&P Lettings. I have passed this over to the Police and my solicitor, they will contact you directly. They will also be in touch with the young lady."

Must be a joke. No one has threatened anyone. And I sure as hell haven't done anything illegal. What the hell will the police do?

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NS1 12th January, 2012 @ 17:29

@landlord shows the company is reading the blog ;)

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YesAdam 12th January, 2012 @ 17:34

Police will ask you for IP Address if their is an offence, which I can not see anywhere. Unless they are talking about the FB Status? in that case thei'd have better chance of contacting facebook.

Bah, Freedom of speech.

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Armin 12th January, 2012 @ 17:35

I don't think it's a joke, just a grumpy director trying to bully you into removing your post. Which of course is a terrible way of addressing the situation. It would have been better if he had contributed with a nice comment entry explaining that they're just trying to make a reasonable living and that the fees aren't OTT. But alas, chose to be a bully instead. Customers aren't idiots, while they might put up with over-the-odds fees, they sure won't put up with bullies.

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Nigel @ LetEngine 12th January, 2012 @ 17:58

This is a really important issue I think. A recent study by the Resolution Foundation (reported in the Guardian here: http://bit.ly/xjtNOT) found that 'admin' fees for tenants were in the region of £95 - £375 for a tenant moving into a property.

We conducted our own study that suggested fees were £80 - £375. Not only was this range the same in Newcastle & Manchester as it was in London, the average was actually slightly higher outside the capital. Given rents are much lower, this means tenants are paying a much higher proportion of the rent in admin fees before they can move into a property.

Tenants often have no idea about the size of these charges until they make an offer. But one of the remarkable things is how few landlords are aware that their tenants are being charged these fees. I guess they (understandably) think their tenant finding fees (which are on average nearly £1,500 per property in London) ought to be covering stuff like this.

I agree there's no problem with agents making a reasonable profit from providing services, but if the charges are so reasonable, why are they not more transparent? None of the agents we surveyed had these prices posted on their websites, we had to ring round them all and ask. Why the embarrassment guys?!

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YesAdam 12th January, 2012 @ 18:16

@Nigel on the subject of publishing fees, ours are variable depending on the type of property.

Our £1k+ a month properties require much more thorough vetting than the DSS properties we manage due to increased "risk" in a bad tenant causing big issues with nicer properties.

One landlord asks for no checks, so we charge no admin fee. She is a oddity though.

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Nigel @ LetEngine 12th January, 2012 @ 18:29

@YesAdam I'm not sure I follow, are you saying that you don't publish because the fees are variable?

You could publish the fee structure? Or if it's more adhoc than that, you could at least give tenants an indication of the range of likely charges (with sufficient disclaimers etc)?

I actually don't think fees are likely to put tenants off, especially in the market we currently have where most of them will move heaven & earth to get a decent property at a good site. But it would increase the feeling of transparency, and might go some way to getting the relationship off on the right foot.

Of course my above point may explain it in some cases. It's in an agent's interests (not accusing you @YesAdam) not to publish these charges in case landlords become aware of them and start asking uncomfortable questions about the size of commission they are paying.

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Jeremy 12th January, 2012 @ 21:52

Hello Jason,

I've read the blog posts just before you commented. I'm having trouble finding abuse. I'm finding lots of outrage and disgust, but no abuse.

It interests me that you don't appear to know the difference between abuse and disgust, bearing in mind you're accusing the contributors to this blog of having a limited vocabulary. And limited intelligence.

Just out of interest, am I one of the ones who suffers from limited vocab an intelligence?

Oh, and I notice you and Clare blogged at nearly the same time. Work in the same office, do you?

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Jeremy 12th January, 2012 @ 22:43

Hello landlord,

In short, you've got nothing to worry about. You may want to contact the writer of the mail to see if they actually want to state their case and give them a fair hearing.

If you want any further advice, get me in our space on the Forum.

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Zoe Charters 13th January, 2012 @ 11:44

We don't charge let fees - it keeps our prospective tenants (mostly students) happy and we make enough from the Landlord to cover the cost of referencing.

It actually angers me that someone can claim £240 is for the best referencing - what utter nonsense!

Zoe Charters
www.sjestates.uk.com

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Twattybollocks 13th January, 2012 @ 16:53

Re R+P Lettings.

Tell em to f*** off or I will if you want? Could do with a pick me up and having a go a the director no less of a lettings agency could be just the job!

What does he/she want from you? An ickle apology and a peck on the cheek? Perhaps he/she should grow some chuddies and a thick skin because he/she is obviously not a business person who understands that any publicity is good (even I have just been to visit their site to see how good/bad it is)!

Perhaps the article is a little too close for comfort regarding extortionate fees and he/she does not want to try to justify them?

And finally to Jason - don't be so precious!

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fredo 14th January, 2012 @ 11:03

Definitely fat little twats - sending an email trying to intimidate you with "solicitors and the police". Do they think you were born yesterday? If someone really is getting legal you get the email straight from the solicitor, not from them.

I just want to mention rplets a few times to make sure this comes up on google when people search for them. R&P Lettings, infor@rplets.co.uk ... Ok, that's probably too much.

For tenants I think the key thing is to be prepared to ditch the property at the last minute on the basis of the fee. "Make it £100 or I go somewhere else". If an estate agent turns down your reasonable offer, how does that work for their client? Estate agents love springing this kind of thing on people, worth it just to see the look on their faces.

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DavidNested 17th January, 2012 @ 10:28

High tenant charges are a real issue.

High tenancy admin charges = some tenants put off = longer vacancy periods for the landlords who are paying an agent to let their property quickly!

The same is also happening with online letting agents. Obviously a competitive space where the majority are focussing on keeping thier landlord charges low. High tenant charges seem to be hidden in the T&C's or not mentioned at all - we've seen tenant charges at over £140.

At Nested, we keep our tenant reference charges reasonable and clear at £35. We also give the landlord the option to complete the referencing themselves if a tenant is particularly sensitive.

David
www.nested.co.uk

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Matt 25th January, 2012 @ 17:18

@Landlord.

I'd guess you're rather legally astute but if their solicitor follows up on their threat I'm more than willing to help you for free.

Alternatively, in keeping with the style of this blog, you could simply say "We refer you to the reply given in the case of Arkell v. Pressdram". He'll love that.

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Jeremy 26th January, 2012 @ 00:38

Hello Matt: It's good to see another Private Eye reader!

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The Landlord Avatar
The Landlord 26th January, 2012 @ 00:59

@Matt,

Many thanks for your offer. Much Appreciated. I've not heard anything from the police or their solicitor so far :)

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Random 3rd February, 2012 @ 09:19

Ur friend looks like she may be worth a ride on.

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The Landlord Avatar
The Landlord 3rd February, 2012 @ 09:54

@Random

Good observation. You're dead right. She's worth a spin :)

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Nickson 28th June, 2012 @ 07:51

Went to view a property yesterday. Nice property. We would have rented the property right away but for the application fees. The agency wanted me to pay £150 and my partner £50 as application fees. That is £200 altogether. Also, they say if the offer was accepted, we will have to pay another £50 to draft the contract. That comes to a total of £250. On top of that we have to pay one and half month deposit and the first month rent before moving in.

A quick search we found that the property has been on the market for quite a while now and as others might have done, we backed off simply because of those unreasonable fees. If landlords were aware that their property were staying longer on the market because of these agent fees, they would have rented their property themselves.

The time has arrived for tenants to rent property directly from landlords than using estate agents. Landlords too need to recognize how these unreasonable agency fees are turning away potential good tenants. In the current state of the economy, very few or less well informed will pay such unreasonable fees. The higher the non-refundable application fees, the longer the property will remain empty.

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Ben Robb 28th June, 2012 @ 08:17

I'm puzzled by the Police comments.

Exposing a letting agent for having ridiculous fees isn't illegal in any way shape or form.

As one of my colleagues mentioned, we don't charge letting fees. We charge the Landlord for letting the property!

Credit checks only cost a couple of quid so we just soak them up. It's not often people will go for a flat, pay three months rent in advance plus a deposit and have appalling credit.

Cheers,

Ben

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Anon, 19th April, 2013 @ 11:38

I'm going through with renting a property and paying £300 just to agent in fees. I've met the landlord and understand that he doesn't have the time or online knowledge to find and deal with tenants and an agent takes this weight from his shoulders at a cost.

Requirements to pass tenent vetting seem strict too! I thought I'd need to prove I can pay the rent for the 12 month contract, but instead needed to be in a financial position where I'd probably be looking to buy... not rent.

To the guy who threatened legal action on this blog's writer..... I think your an f'ing twat!

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Brenden Lowder 14th May, 2014 @ 23:49

I used to be a letting agent and I did charge high fees as that is where a good portion of the money is upfront then the rest would come from the landlord over time but thats not great until you have 50 plus properties on the books .I found myself feeling guilty to the point I gave it up , I just buy and sell now . My advice to anyone thinking of renting is 1)don't be made to feel small because your renting 2)question any charges if you don't like the answer walk away 3)REMEMBER these checks only cost about a tenner don't pay anymore do ready want to be managed by a company that has just ripped you off. the more people who walk away and refuse to pay these charges will chase these muggers out.

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Brenden Lowder 15th May, 2014 @ 00:04

PS Just note to r & p lettings Its not in your best interest or even very business like to post any kind of response to this kind of chat/forum because as you so justly were blown out of the water and made to look rather silly. Maybe this is how you do business with ignorance and empty threats but I wish you well and look you got another plug !!!!!!

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Avarice 6th February, 2015 @ 17:11

to any land lord who places a high value on property or places high admin fees, you are a cock and you are making your money by cheating others out of what is seen as a human right, i hope threats you receive cause you as much stress as you do the general population however there threats are hollow where as yours are very real.

maybe one day all you greedy empty hearted estate agents, will come to realise what a plastic and corrupt life you have, and how alone you are and you will come to the point in which you decide to take drastic action on your self, or you will indulge in your greed and grow fat and old and die of sickness.

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