- Heyworth Gordon
Slow Death of High Street Estate Agents
Exposing the Confusing Landscape of Exorbitant Fees that are Unjustifiably Charged to Landlords
One of the biggest challenges for Landlords, when approaching the market to let their property, is understanding the fee structures set by high street companies. At first glance, nothing is clear or apparent. Agent websites are a glittering wonderland of photographs, carefully placed typography and self-aggrandising accolades. When people do manage to locate the fees section, the information is just about enough to make them choke on their morning Cornflakes.
Looking at one of the largest estate agents in the UK (for legal reasons, let’s call them “Moxtons”), their fees are as follows:
Tenant Placement for Long Let – 13.2% of annual income
Managed Long Let with Tenant Placement – 20.4% of annual income
Managed Short Let (less than six months) and Tenant Placement – 31.2% of annual income
Putting some context on that, fees on rental income of £1500 per calendar month (annual rent of £18,000) would work out as follows:
Tenant Placement Fees for Long Let – £2,376
Managed Long Let with Tenant Placement – £3672
Managed Short Let (less than six months) and Tenant Placement – £5,616
If that wasn’t enough, when it comes time to renew a lease (even if the estate agent doesn’t manage the property) a fee of 12% of the annual rent is due to them – for doing nothing but getting the lease resigned! That fee is due in perpetuity, while the same set of tenants remain in place.
If the question, “Why do estate agents charge a percentage of a Landlord’s earnings?,” is posed, no clear explanation can provided by anyone. The wide eyed confused looks and mumbled responses are telling. The industry seems to have evolved this way and the market accepted it – very much a case of “if it’s not broke, don’t fix it.”
With outrageous prices and senseless fee structures, it’s no wonder alternative services are cropping up all over the internet – and we believe that Landlords deserve to know about them.
The List of the Best Online Letting Agents is available from Landlord Blog / Life. Prices for tenant-find services range from free to £99. It’s important to check each service against your need but most provide advertising on the major UK portals (like, Rightmove and Zoopla). Of note, it’s not possible for private Landlords to approach Rightmove or Zoopla themselves – an intermediary is required.
When it comes to property management, a number of other companies offer services but most of them are still clinging to the aforementioned antiquated pricing model.
At Heyworth Gordon, we looked at this and decided to change our approach. Instead of charging a percentage of earning, we base our fees on the size of the property – charging a flat fee per square foot. This is based upon the idea that the larger a property is, the more maintenance it requires. Our tenant placement is handled with a flat fee as well, allowing Landlords a clear view of their fees from the start. We believe this approach is simple, sensible and fair.
We also encourage our Landlords to take the reins if they want to do so. One of the best, and underrated resources in the UK, is the National Landlords Residential Association. It champions information, training and support. For just £85 per year, access is provided to their compendium of articles, documents, webinars and expert advice helpline. Trust us, it’s worth every penny.
Our advice, don’t be afraid to shake up the system. Ask questions, push back and don’t be afraid to get into the driving seat. Let’s champion in a new era that sees traditional estate agent adapt to market demand, and not the other way around. Remember, nothing changes, if nothing changes – be bold and take part of the new revolution!