Rogue agents 'make 600 per cent profit in secret charges'
Rogue letting agents are making huge profits by overcharging for basic services, a new study has claimed.
Mystery shopper research carried out by The Happy Tenant Company found some agencies were making profits of up to 600 per cent via these unscrupulous practices.
The organisation said agents are charging an average total of £935 for seven basic services - tenant references, deposit protection, inventories, producing a tenancy agreement, gas safety checks, energy performance certificates and cleaning. It claimed this is 52 per cent higher than the cost price of £489.
Jonathan Monjack, Happy Tenant Company chief executive, commented: "The worst case we know of is an inventory clerk who was paying one agent a 'secret commission' equal to 60 per cent of the cost.
"This is unknown by the landlord and paid to the agent in addition to the mark-up the agent makes to the contractor's fees when recharging the cost back to the landlord."
He said most landlords do not realise some letting agents are making "secret profits" in this way and called for these bad practices to come to an end.
This is not the first study to criticise the practices of letting agents and this undermines the efforts of the professional, law-abiding agencies that make up the vast majority of the sector.
Such findings will strengthen the calls for regulation of the letting industry, which is a topic that has received a lot of attention throughout 2013. Several bills on the issue have been put before parliament over the course of the year but none of these has been enforced at present.
However, the Advertising Standards Agency has recently introduced a new ruling regarding the way letting agents show information on fees in their adverts. As of November 1st, details of charges must be "prominently" displayed on any promotion and agencies that fail to comply may be penalised.
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