Landlords deterred by letting agent renewal fees

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by Gill Montia

The National Association of Landlords (NLA) has found that 73% of buy-to-let investors based in the South of England are less than happy with the renewal service they receive from their letting agents.

According to the NLA, agents are charging between five and 15% of annual rental income to renew a letting, regardless of the work involved.

In the NLA’s survey of 500 landlords, 88% said that the fees discouraged them for employing a letting agent in the first place.

However, buy-to-let landlords with properties outside London and the South East are better place and likely to pay a fixed fee in the region of £50.

In February of this year, the Office of Fair Trading (OFT) issued High Court proceedings against letting agent, Foxtons, under the Unfair Terms in Consumer Contract Regulations 1999.

The OFT considers that Foxtons’ letting agreements can potentially require landlords to pay substantial sums in renewal commission even if the firm plays no part in persuading the tenant to stay, and no longer collects the rent or manages the property.