Tenants face excess charges of £600+!


Sunday 31st May 2009

Property of the Week from Property Mentor Workshop
Property of the Week from Property Mentor Workshop
Area – London

Property type – Semi Detached House

Number of Bedrooms – 5

Length on Market – 4 months

Valuation – £290,000

Bought – £230,000

Positive Cash Flow – £500 per Month

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Some tenants are facing excess charges of £600+ a month according to Citizens Advice.

Speaking to 1,300 tenants across the UK between August and November of 2008, of those interviewed the vast majority were found to be paying hundreds of pounds to their letting agents for tasks that bore no actual relation to the cost of their service.

What are these extra charges?

The worrying part about this discovery by Citizens Advice was the revelation that many of these extra costs were being charged out to both landlords and tenants:

Non-refundable holding deposit
Deposit administration charges
Administration fees
Check-in/check-out inventory charges…

A part from each of these tasks existing beyond the letting agents actual expected responsibilities, they are vastly over priced.

Take their reference checks. Typically a procedure performed by all letting agents as part of their setup agreement, tenants were expected to pay reference charges of £10-£275 as well as a fee of £12-£200 for renewing their tenancy agreements. Both un-necessary charges.

How can these charges affect tenants?

Whilst the Association of Residential Letting Agents code of practice is designed to ensure letting agents fees are clear and reasonable, this survey by Citizen’s Advice clearly proves that many are doubling their charges in order to increase their profit margins.

The consequence of such charges though is that letting agents are creating a barrier for people on low to average incomes which is preventing them from entering onto the property market.

Luckily with the governments plans to implement registration charges for landlords and letting agents, this shall worm out rogue letting agents and put a stop to these additional charges.

Interested in learning how these additional charges can affect your property investments? Why not attend one of the 2 hour taster sessions to find out more.

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