Buy-to-let investors should think twice before using ‘greedy’ high street letting agents according to student letting platform StudentTenant.com
In the year to September agents charged £1,387 in commission per case, effectively profiting from a 3% annual rent rise in the process.
StudentTenant.com said rental agents typically charge 12.7% of the 12 month shorthold tenancy agreement.
Danielle Cullen, managing director of StudentTenant.com, said: ‘There’s a significant shortage of good rental stock which means higher rents and yields, which can be great news for landlords, but not so great for tenants.
“But when much of that gain is eroded by greedy agents taking a fatter and fatter chunk of it, 12.7% of what would otherwise be the landlord’s income in effect, then buy-to-let investors might want to think twice about resorting to an old fashioned high street based rental firm.”
“It’s really hard to justify the amount that a typical high street letting agent charges in the first place, let alone above inflation increases in most parts of the country.”
In some areas they earned a lot more, as London letting agents typically made £2,369.82 per transaction.
Their profits increase in Lambeth in particular, where rents rose by 12% year-on-year to average at £2,874.