Charging incoming tenants £5 a time for ‘photocopying’ . . . or levying additional fees for ‘keys’ . . . or expecting extra money if people want to move in on a Saturday . . . would strike most folk as petty and grasping. Charging £200 to change the surname on a tenancy agreement because someone gets married or divorced verges on the plain outrageous.
These are all apparently practices in use at some agencies around the country that will increase the expenses faced by tenants when they take a rented property.
I would say immediately that these practices do not happen at DDM Residential – and never will.
For the most part the add on bits and pieces are, within the great scheme of things, quite small beer. (Although a £200 charge for changing a surname clearly is not.) However lots of bits and pieces can add up and make quite a difference.
Just how much of a difference there are in agents’ fees was revealed by new national research. It was quite an eye-opener. Tenancy fees vary by as much as £1,500%.
The investigation took as a case study an unmarried couple moving in to an average rental property in towns and cities all over the country. The lowest fees were found in Harborough in Leicestershire (£137) and the highest at Basingstoke in Hampshire (£622).
As one might perhaps expect, the majority of the most expensive towns are in the South including Slough (£543), Cirencester (£535) and Reading (£531) to name but a few. That said there were some surprises such as Lichfield in Staffordshire and Alnwick in Northumberland, where the typical tenancy fees were £530 in both cases.
The research revealed that whilst fees in Northern Lincolnshire were not the cheapest in the country, they were amongst the most reasonable. They looked at Cleethorpes (£199-£267) and Scunthorpe (£203-33). Those are average fees for the area. Our fees are even less (£155).
I will break the figure down in a moment but before I do let me address the question of what tenancy fees are actually supposed to be about. Clearly there are costs in setting up a tenancy. Those include credit checking prospective tenants, setting up the legal tenancy agreement, preparation of the property inventory, checking tenants in and so on and so forth.
Along with the majority of agents outside London and the South East we charge a single flat fee for these services. Most of the rest charge on an individual and itemised basis, which is when the nonsense about photocopying and additional charges for keys comes into the equation.
So through DDM Residential the fees for a couple moving into the average rented property in our region would be for two comprehensive reference and credit checks at £30 each. These are carried out by a third party national specialist agency. Also a flat fee for the legal agreement that includes meeting at the property and spending time checking them in and running through the inventory just £95. This is a total of £155.
That makes our fees amongst the lowest in our area – and, of course, pretty close to those in Harborough, the cheapest place in the country.
Next time you speak with your managing agent I would suggest you ask how much they charge tenants to see the difference. Remember high fees will also put tenants off from applying for properties.
How are we able to keep our fees so low? Apart from the fact that we are straight, decent and honest (naturally), it is down to a question of scale. We manage the largest portfolio of rented property in the region and that of course brings major benefits in terms of costs.
Frankly I am quite embarrassed by some of the industry practices revealed by this research but if it leads to more transparency then some good may result from the project. It is now a legal requirement to be open and upfront about fees. Our fees are to be found in our offices, on our website and in all relevant literature including newspaper advertising. Sadly not all agents are quite so forthcoming.
The market is still strong for demand. Landlords are continuing to add to their portfolios and we are seeing new landlords also enter the market. Checking our list of available properties earlier this week on ddmresidential.co.uk there were 84 properties available ranging from a ground floor flat in Cleethorpes at £300 a month all the way through to a superb four-bedroomed detached house in Ulceby at £895 a month.
The next DDM Property Auction will be on 25th August. Current properties available are shown on our website and entries are still being invited from those who want to sell on a this date for no fee. For further information and to enquire about our managed service, please visit your local office, download a free Landlord Guide to Letting at ddmresidential.co.uk or call our central number 0845 4 599 499.