The majority of landlords are happy with the service provided by their letting agent (56%), 42% believe their agent charges too much and 16% have had additional charges made without any forewarning, according to the latest industry insight from Total Landlord Insurance.
The survey of 1,205 UK landlords commissioned by Total Landlord Insurance found that 57% of landlords believe the fees they are charged by their letting agent are fair. However, 42% believe they charge too much, and just one per cent believe that they should be charged more.
The good news is that the majority of landlords do find value for money in the service provided by many letting agents.
Over half of landlords (56%) rated the service provided by their letting agent as above average to excellent, while just eighteen per cent stated it was below average to poor.
Sixty one per cent stated that they had never experienced a late rental payment, with the majority of those who have (33%) stating it was the fault of the tenant or another issue such as banking or technical problems. Leaving just 5% to have had to wait for their rental income as a result of their letting agent.
However, 16% did reveal that their letting agent has previously made unexpected deductions to this rental income without discussing why before doing so.
The most common reason given was for maintenance work on the property carried out by the agent’s contractors, with additional management fees, a gas certificate, electrical safety checks and tenant finding fees also ranking high.
Eddie Hooker, CEO of the Hamilton Fraser Group, who operate industry schemes such as Total Landlord Insurance, the Property Redress Scheme and Client Money Protect says:
“I’m not entirely surprised by these results. Fees are always going to be a contentious issue, especially in the current climate, with many landlords still struggling financially from the impact of COVID on their tenants and added to this, now the cost of living crisis. Many landlords have unfortunately had to foot the bill. However, while some landlords may feel that the fees charged by their letting agent are too high, this survey shows that the majority do believe they pay a fair price.
“This is undoubtedly due to the perceived value they feel their agent brings and there’s no doubt that the quality of service provided is an area the industry has improved on in recent years.
“Despite this, misunderstandings do still happen and one of the most prominent complaints we receive from landlords through the Property Redress Scheme is unexpected charges made to them by their agent.
“This can be due to a range of factors, but more often than not, it’s down to maintenance work carried out on their property by the agent’s contractors. Some landlords may understandably want to undertake this work themselves in order to keep costs down and so it’s important they know where they stand in terms of their contractual obligations with the agent.
“These disputes can quite often be avoided by clearer, more frequent communication. The majority of landlords don’t tend to dispute the charge itself, but the surprise nature of this reduction in rental income can often leave them in a problematic situation.
“Agents can help reduce these kinds of complaints by forewarning their landlord customers of any charges they may not be expecting. This will help landlords to manage their own financial obligations in advance and this in turn will prevent a dispute reaching the PRS redress scheme more often than not.
“And a final message is for landlords to routinely ask their agent whether their rental money is protected by client money protection insurance. Despite being a mandatory requirement for letting agents, many do not have this insurance which could leave landlords high and dry if their agent absconds with their rental monies.”