Landlords renting property through high street letting agents are paying up to £1bn a year on renewal fees, according to property-tech lettings company, Hello Neighbour.
While renewal fees vary, the average is approximately 8.5% (incl. VAT), meaning that for an average London rent of £2,500 a month, landlords are handing over an additional £2,550 to letting agents for their current tenants to renew – something Hello Neighbour dubbed ‘money for nothing’.
Phil Shelley, chairman of Hello Neighbour, said: “For too long, high street agents have taken advantage of landlords by charging fees for things that just aren’t fair – especially renewal fees.
“It’s crazy to think that landlords are handing over this kind of money every time their tenants simply choose to stay in their home for another year.
“Punishing landlords for having a great property that people want to remain in is just absurd. Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them. So, in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.
“We are determined to put a stop to this and that’s why today we are launching our “Stop Renewals Fee” campaign to educate landlords and let them know there is a better way so we can change lettings for good.”
There are over one million rental properties in London and approximately 760,000 of those properties are using high street letting agents.
With the average tenant in London staying in their rental property for two years, landlords are currently paying renewal fees on 380,000 properties each year.
Hello Neighbour has launched a campaign to remove renewal fees, which can be found here.
