The current practice of charging renewal fees by traditional high street letting agents is being criticized as a waste of landlord funds by online lettings platform Hello Neighbour.
In a recent announcement, Hello Neighbour, a platform operating in London and other parts of southern England, highlighted the prevalence of traditional high street letting agents in the rental market. According to the platform, out of over one million rental properties in London, approximately 760,000 rely on these agents.
Hello Neighbour argues that landlords are burdened with renewal fees for around 380,000 properties each year. The platform claims that the average fee, including VAT, is around 8.5 percent. This means that for an average monthly rent of £2,500 in London, landlords are paying an additional £2,550 to letting agents for their current tenants to simply renew their contracts. Hello Neighbour goes on to state that if a tenant stays for a third year, the costs continue to accumulate.
To address this issue, Hello Neighbour is launching a Stop Renewal Fees campaign. However, individuals can only sign up for the campaign by providing their contact details. Phil Shelley, the chairman of Hello Neighbour, criticizes high street agents for taking advantage of landlords and charging unfair fees, especially for renewals. He believes it is absurd that landlords have to pay such fees every time their tenants choose to stay for another year. Shelley argues that these costs are ultimately passed on to tenants through increased rents, resulting in both landlords and tenants suffering while letting agents’ revenues soar.
Hello Neighbour, founded in 2018 and currently operating in London, Brighton, Oxford, Guildford, and Reading, plans to launch a self-service offering in January that will be available throughout the UK.
This commentary sheds light on the issue of renewal fees charged by traditional high street letting agents. It highlights the burden faced by landlords and the subsequent impact on tenants. Hello Neighbour’s campaign aims to challenge the current practice and promote a fairer approach to fees in the rental market.
