Letting Agent
Encyclopedia
A letting agent is a United Kingdom
term for a facilitator
through which an agreement is made between a landlord
and tenant
for the rental of a residential property. In the UK the agreement between landlord and tenant is normally formalised by the signing of a tenancy agreement. A letting agency will normally charge a commission
for their services, usually a percentage of the annual rent.
Letting agents will often operate under the umbrella of an Estate Agent
due to the synergies that exists between the two professions, but there are many agents that deal exclusively with lettings.
Although there are two main types of renting, letting agents deal primarily with tenancies between private individuals and landlords.
A renewal fee will normally be charged if the tenant extends or renews their tenancy. This tends to be at a slightly lower rate than the original introduction fee. Additional charges are often made for drawing up the Assured Shorthold Tenancy
agreement and protecting the tenant’s deposit to comply with the Tenancy Deposit Scheme
legislation. Renewal fees can vary in cost, form £30.00 to over £100.00.
An increasing number of letting agents are charging an ever-expanding range of fees, especially toward tenants. A typical breakdown of these fees is listed below -
(ARLA) and the Royal Institution of Chartered Surveyors
(RICS). These have codes of practice and compliance controls which govern the activities of their members.
The English government also provides its own accrediting body for letting agents, this body is called NALS (National Assured Letting Scheme) . See http://www.nalscheme.co.uk/whatis.htm
In Scotland all landlords must be registered with the local authority. Whilst agents are not required to register, they are actively encouraged to do so.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
term for a facilitator
Facilitator
A facilitator is someone who helps a group of people understand their common objectives and assists them to plan to achieve them without taking a particular position in the discussion...
through which an agreement is made between a landlord
Landlord
A landlord is the owner of a house, apartment, condominium, or real estate which is rented or leased to an individual or business, who is called a tenant . When a juristic person is in this position, the term landlord is used. Other terms include lessor and owner...
and tenant
Leasehold estate
A leasehold estate is an ownership of a temporary right to land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord....
for the rental of a residential property. In the UK the agreement between landlord and tenant is normally formalised by the signing of a tenancy agreement. A letting agency will normally charge a commission
Commission (remuneration)
The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...
for their services, usually a percentage of the annual rent.
Letting agents will often operate under the umbrella of an Estate Agent
Estate agent
An estate agent is a person or business that arranges the selling, renting or management of properties, and other buildings, in the United Kingdom and Ireland. An agent that specialises in renting is often called a letting or management agent...
due to the synergies that exists between the two professions, but there are many agents that deal exclusively with lettings.
Although there are two main types of renting, letting agents deal primarily with tenancies between private individuals and landlords.
Services and fees
Services offered by lettings agents usually break down in to three parts:- The basic service is the introduction of a Landlord to a tenant. The cost to the Landlord for this service is normally a percentagePercentageIn mathematics, a percentage is a way of expressing a number as a fraction of 100 . It is often denoted using the percent sign, “%”, or the abbreviation “pct”. For example, 45% is equal to 45/100, or 0.45.Percentages are used to express how large/small one quantity is, relative to another quantity...
of the total rent over the term of the tenancy and is charged up-front. The commission for this service is normally between 7% & 12.5%. - Tenants are charged a so-called "administration fee" up-front. This includes the processing of the application, and usually involves prospective tenants undergoing credit searches. Fees can vary widely, and can range from £50.00 - £300.00. Often fees are non-refundable, unless the landlord withdraws from the process.
- Many agents will offer to collect the rent from a tenant for an additional 2-3% commission calculated as above.
- Full Management is the term most often used to describe the day-to-day management of a rental property. Many agents provide this service on properties which they have let for a commission of between 7% and 12.5%. This part of the commission is normally charged monthly.
A renewal fee will normally be charged if the tenant extends or renews their tenancy. This tends to be at a slightly lower rate than the original introduction fee. Additional charges are often made for drawing up the Assured Shorthold Tenancy
Assured shorthold tenancy
The Assured Shorthold Tenancy is the default tenancy for most dwellings in England and Wales. It is a form of Assured tenancy with limited security of tenure, which was introduced by the Housing Act 1988, with important changes made by the Housing Act 1996....
agreement and protecting the tenant’s deposit to comply with the Tenancy Deposit Scheme
Tenancy Deposit Scheme
Under the provisions of the United Kingdom Housing Act 2004 every landlord or letting agent that takes a deposit for an assured shorthold tenancy in England and Wales must join a tenancy deposit scheme. The new regulations came into effect from 6 April, 2007....
legislation. Renewal fees can vary in cost, form £30.00 to over £100.00.
An increasing number of letting agents are charging an ever-expanding range of fees, especially toward tenants. A typical breakdown of these fees is listed below -
- Administration fee - see above
- Inventory fee - A separate fee often imposed by the letting agent, involving a physical check of the proposed rental property
- Tenancy extension/renewal fee - see above
- Exit fee - similar to the inventory fee, a final inspection carried out by the agent/landlord
Regulation
There are currently no statutory arrangements regarding the regulation of letting agents. Around half of UK lettings agents are currently self-regulated. The principle organisations for lettings agents are the Association of Residential Letting AgentsAssociation of Residential Letting Agents
The Association of Residential Letting Agents is a professional organisation for residential lettings companies in the United Kingdom.ARLA was formed in 1981 and has grown as the residential lettings market in the UK has expanded through the popularity of Buy to let investment...
(ARLA) and the Royal Institution of Chartered Surveyors
Royal Institution of Chartered Surveyors
The Royal Institution of Chartered Surveyors is an independent, representative professional body which regulates property professionals and surveyors in the United Kingdom and other sovereign nations....
(RICS). These have codes of practice and compliance controls which govern the activities of their members.
The English government also provides its own accrediting body for letting agents, this body is called NALS (National Assured Letting Scheme) . See http://www.nalscheme.co.uk/whatis.htm
In Scotland all landlords must be registered with the local authority. Whilst agents are not required to register, they are actively encouraged to do so.