The Unspoken Impact: How Estate Agents Cause Tenants to Lose Their Homes
Sky-high Fees are Forcing Landlords to Evict Tenants in Place of New Renters
Estate agents operate in the market as the gatekeepers to properties, both large and small. For years they’ve cultivated an ecosystem that let’s the public believe they’re in place to safeguard homes – providing a service to tenants and advice to landlords.
It doesn’t take much to realise that this isn’t always the case. As you dive deeper into this pool, underneath the meticulously manicured surface, the waters become far more murky.
Heyworth Gordon provides an alternative offering to the slow, opaque and expensive offering of high street agents. Working in the rental market, we observe the negative impact that estate agents have on tenants and feel it’s important for people to understand how the contractual fine print has a real world impact on renters’ homes and owners’ stress levels.
This is an actual situation that occurred in the summer of 2022:
A London landlord had a local estate agency place tenants (a lovely group of three professional sharers) into a property – a tidy little flat with views over Greenwich. As many properties don’t accept sharers, the tenants were over the moon to have secured such a lovely piece of property in a quiet location.
In the past, this landlord has always been quite hands on, happy to manage the property after the tenants were in place. But, with COVID restrictions lifted, she had made extensive travel plans and wanted an agency that could take responsibility in her absence – we were more than happy to help.
For a ten months we liaised with the tenants, assisting quickly whenever they needed a repair. Then, as the initial term of their lease was set to expire, they asked if it was possible to renew for another year.
As a firm, we only charge a small fee to renew and reissue a lease. We don’t view it as a complicated activity and set the rate accordingly. But, when our landlord approached the original letting agent to do this, she received an unexpected response.
The “lettings and renewal service” was billed at 12% of the annual rent. This meant, in order to renew the lease and keep the current tenants in place, the landlord had to pay the estate agent £2,880.00.
After much deliberation, the landlord decided that she simply could not bear such an exorbitant cost. Although she felt terrible, she made the decision not to renew the lease and decided to displace the professional sharers from the flat – taking it upon herself to find new tenants for the property.
The task of breaking the news to the tenants fell to us. We did all that we could to be delicate, explaining that it was nothing that they did. It was the estate agent’s astronomical fee that was the culprit. But, no matter how gingerly we phrased it, the result was the same – they were displaced from their home.
In the background, the estate agent was unsympathetic – only concerned that they’d lost a handsome fee.
The UK Government works hard to ensure that Landlords operate under a strict set of guidelines – dutifully trying to protect tenants from a corrupt bunch or wayward crooks. Guarding their Right to Quiet Enjoyment and reviewing (potentially abolishing) Section 21 no fault evictions, in a bid to secure homes for longer.
What seems to be overlooked is the damage that the licensed, insured professionals are doing to private renters. They run what is little less than a racket in the background, operating without due care or consequence for the pain and expense they cause to people.
But don’t despair, there’s some good news is rumbling on the horizon! There are a lot of alternatives to estate agents these days. If you’re a landlord then have a look online at the varied choices that now exist. If you’re a tenant then try to get information to your landlord about better, more economical options.
If everyone on both sides of the fence calls for change then reform won’t be too far away!