Inside Intel On Letting Industry, Absolutely Shocking!

[Toto deVeer]

This is something that needs immediate attention by the regulators.

Recently a relation needed to find accommodation in order to start a new job, something that is becoming increasingly rare. This person located an unfurnished flat, one bedroom, near the bottom of the price range.

A finders fee was needed. Then a large deposit. Then the program started in earnest.

The process, that took weeks to conclude, involved SIX different companies, and weeks of delays. This person almost lost the work opportunity because of the delays, and in the end had to pay the full 6 months rent up front to just to take possession.

But here's my concern. Why are there six companies? Does this not just drive the cost of letting up for the tenant, and slow down the process to a crawl? Why so complex?

I passed this question to a good colleague who has been in the btl business for 40 years. He told me that he had noticed the same development. He claims that the re industry is suffering so much that groups of companies are BANDING TOGETHER TO SHARE FEES.

Is this not the very definition of a cartel? Should this sort of activity be banned? From my relations' experience, he feels as though he has just been financially raped. And I don't blame him.

This info, by the way, is just the tip of the iceberg. He is considering legal action as well, as there were a number of mistakes made by these parties during the process.

[Guest_FaFa!_*]

Where was this? Renting market is as regional as the buying one.

[Toto deVeer]

I don't want to get into too much detail, as there will be likely legal action. But the companies involved, none of whom had offices in the city where the property is located, are in 4 different major cities in the UK.

Edit: In essence, this could happen almost anywhere in the UK. The agents were no where near the location of the property.

Edited December 13, 2010 by Toto deVeer

[Guest_FaFa!_*]

I don't want to get into too much detail, as there will be likely legal action. But the companies involved, none of whom had offices in the city where the property is located, are in 4 different major cities in the UK.

Edit: In essence, this could happen almost anywhere in the UK. The agents were no where near the location of the property.

TBH I found your post confusing. 6 different companies? You mean estate/letting agents or what? Six weeks is ridiculous and it is insane your friend needed to put down 6 months in advance. It sounds like a crap/diddling agent rather than anything else. We have managed to put a holding fee down for a property and be in within 5 days twice before.

[Toto deVeer]

TBH I found your post confusing. 6 different companies? You mean estate/letting agents or what? Six weeks is ridiculous and it is insane your friend needed to put down 6 months in advance. It sounds like a crap/diddling agent rather than anything else. We have managed to put a holding fee down for a property and be in within 5 days twice before.

From what I can gather, the main agent is one of the bigger agencies in the UK. But there were 4 companies tied into the agent's role, and two others who were performing ancillary duties, as far as I can tell.

These companies are just predators as far as I can see; they add absolutely nothing the benefit the process, and in fact, actually operate with incentives that are disadvantageous to the property owner and the tenant.

[Bloo Loo]

I cant understand it either...maybe the thing is a bankers' shells' possession, and maybe they are torn between getting out, or letting out??

[Reck B]

This definately happens.

letting agents 'allow' access to tenants in order to carry out credit checks etc in return for a cut of the application fees.

Whilst these checks are acceptable the cost of them isn't.

Buying a credit report costs, what, £3?

Faxing an employer for a job ref costs <£1

Faxing prev letting agent for ref costs <£1

Where do they get the application fees of over £100 from? They have become the norm because of the need to pay the wages of the staff in the wholly unnecessary new industry of tenant referencing.

Also, letting agents sell your details onto utilities switching companies, so shortly after moving in, you'll get a call "on behalf of your letting agent" to get your gas/electricity metres registered. i.e so they can switch you and earn commision for doing so.

Edit to add - our letting agent also charges for inventory fee and check out cleaning and tried to make us take their contents insurance out.

3 other totally unnecessary companies in the process.

So that's;

1) letting agent

2) reference company

3) utility switching scam

4) inventory company

5) check out cleaning

6) insurance scam

Just to rent a sodding house for 6 months.

Edited December 13, 2010 by Reck B

[Toto deVeer]

I cant understand it either...maybe the thing is a bankers' shells' possession, and maybe they are torn between getting out, or letting out??

I couldn't understand it either. Then discussing the matter with someone who is a professional landlord for 40 years seemed to crystallize it. There is such a battle for survival amongst the estate agents out there that some have taken to banding together, each accepting reduced fees, in order to survive. But this is a cartel, imv, in that it could also be used to eliminate competition.

Edited December 13, 2010 by Toto deVeer

[easy2012]

This is something that needs immediate attention by the regulators.

Recently a relation needed to find accommodation in order to start a new job, something that is becoming increasingly rare. This person located an unfurnished flat, one bedroom, near the bottom of the price range.

A finders fee was needed. Then a large deposit. Then the program started in earnest.

The process, that took weeks to conclude, involved SIX different companies, and weeks of delays. This person almost lost the work opportunity because of the delays, and in the end had to pay the full 6 months rent up front to just to take possession.

But here's my concern. Why are there six companies? Does this not just drive the cost of letting up for the tenant, and slow down the process to a crawl? Why so complex?

I passed this question to a good colleague who has been in the btl business for 40 years. He told me that he had noticed the same development. He claims that the re industry is suffering so much that groups of companies are BANDING TOGETHER TO SHARE FEES.

Is this not the very definition of a cartel? Should this sort of activity be banned? From my relations' experience, he feels as though he has just been financially raped. And I don't blame him.

This info, by the way, is just the tip of the iceberg. He is considering legal action as well, as there were a number of mistakes made by these parties during the process.

Just look into a reputable local classified and call the landlord directly ?

[Toto deVeer]

Just look into a reputable local classified and call the landlord directly ?

Tried, there was nothing listed. And the landlord is a private limited company.

[IP Newcomer]

Unless this is a "for sale/to let" or foreclosure property there's no real sense in this. They're losing six weeks' rent and they're screening out around 80% of tenants through insisting on six months rent. If this was a cartel it wouldn't last very long as landlords would be suffering even more than tenants and would go elsewhere.

[EUBanana]

I've never yet met a competent letting agency, they are all vultures, and useless vultures at that.

My landlord before current was a real nice guy, was on good speaking terms with him, and I brought up the crapness of letting agencies with him once - he said he'd never met a competent letting agent either.

So I think it's not just bad for the tenants, though I imagine the tenant is the more inconvenienced party.

[happy_renting]

I couldn't understand it either. Then discussing the matter with someone who is a professional landlord for 40 years seemed to crystallize it. There is such a battle for survival amongst the estate agents out there that some have taken to banding together, each accepting reduced fees, in order to survive. But this is a cartel, imv, in that it could also be used to eliminate competition.

But a competing agent could undercut their inflated fees, and also make it easier to let from them. The cartel would not be in a strong poition.

[tim123]

This is something that needs immediate attention by the regulators.

Recently a relation needed to find accommodation in order to start a new job, something that is becoming increasingly rare. This person located an unfurnished flat, one bedroom, near the bottom of the price range.

A finders fee was needed.

Finders fees are illegal. Any savvy renter should walk at this point

tim

[Bloo Loo]

so its a bit like SPA supermarket group...a power buyer group.

so a pool of properties are for rent from various agents, and one gets the lead and has to deal with the pool.

sounds like rightmove on laxatives.