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A point raised in another thread about the coming fee ban and profit letting agents make off of various products inspired this one:
It's obvious that the fee ban is going to cause letting agents to try and charge landlords for at least some of the money they can no longer charge tenants, but I wanted to focus in on just one thing: tenant referencing.
A lot of agents were clearly taking the absolute mickey, charging tenants hundreds of pounds for something that costs them £20 or so, plus a bit staff time at whatever the person’s hourly rate is. Now these agents are going to have to try to:
Option c) is an interesting one as it raises questions over what constitutes the ‘professional reference’ required in the small print of a lot of landlord buildings insurance policies. Would a Rightmove Passport make the grade I wonder?
Anyway my core curiosity really lies with a) and that leads me to my question:
What price would induce you to pay out of your own pocket for a reference every time, bearing in mind you could sort it yourself for about £20 and a bit of legwork?
I'd rather be 100% sure that every tenant who came to the landlord through us got referenced than leave it to the landlord who might not actually do it!
I use OpenRent, who charge £25, no legwork required. Like with any business transaction, if you want to charge more, you're going to have to show added value to Landlords. I.e. a guarantee to pay rent, and evict if the references through you turn out to be problem tenants, since referencing is a good starting point, but no guarantee of problem free tenants. Traditional Agents need to evaluate their proposition compared to online agents and win over potential landlords on the services you can't get through an online agent i.e. viewing management, professional photography, legal advice helplines and so on.
I also use OpenRent, but I only get charged £20?
That's my poor memory... I haven't referenced new tenants for some time
We are an online agent too. We don't currently charge landlords anything, but obviously will need to do so from 1st June. I'm thinking £25 is probably fair.
Ah so glad OpenRent is working out for you Rachel!
Visum, yeah we think £20 make sense. It's a small sum, but we think that some small disincentive is needed to protect landlords from tenants having no real stake in each property application they make and just speculatively applying to many properties.
How much is Visum charging tenants for referencing at the mo?
The UK's largest letting agent. No admin fees for tenants, first listing free for landlords!
Proud OpenRenter, reluctant lead tenant.
We charge £90 for up to 2 tenants or 1 tenant and 1 guarantor. Obviously that's all going to stop in a few weeks.
Ah OK, interesting! So £45 per person is fair for tenants, but £25 is fair for landlords?
Subjective impressions of 'fairness' have nothing to do with it. It's about what the market will stand. Interestingly we get moans from local agents that we are 'too cheap', so I guess it's all a matter of perspective.
OK I get you. I just asked because you said "I'm thinking £25 is probably fair."
Yes, poor description on my behalf really. I should have said 'what landlords would consider fair for the work/costs involved'