London tenants who stay in their property for more than a year are paying 13 months’ rent a year to the cost of renewal fees, research from property-tech lettings company, Hello Neighbour has revealed.
With the average London rent at around £2,500 a month and the average renewal fee at 8%, the landlord is paying £2,550.
If that gets passed on to the tenant then they are effectively paying an extra month’s rent to stay in the same property – just to account for the renewal fee.
In a survey of 300 landlords with properties in the London area, Hello Neighbour found that two in three (65%) of these landlords said that renewal fees from letting agents had impacted their decision to increase rental fees.
Phil Shelley, chairman of Hello Neighbour, said: “For too long, high street agents have taken advantage of the rental market by charging fees for things that just aren’t fair – especially renewal fees. Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them. So in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.
“We are determined to put a stop to this and that’s why we have launched our “Stop Renewals Fee” campaign to educate landlords and tenants and let them know there is a better way, so we can change lettings for good.”
For tenants that only sign a one-year agreement, the landlord renewal fee recurs every time they sign up for another year – with specific clauses in tenancy agreements that incur an annual renewal fee for as long as the tenant remains in the property, the cost just keeps adding up, with the tenant potentially paying the price.
To combat these unfair fees, Hello Neighbour has launched its “Stop Renewal Fees” campaign, encouraging landlords and tenants across the UK to sign up to the campaign here and pledge their support to stop renewal fees for good.