Lettings

Estate agents who handle lettings of commercial property normally charge between 7–10% of the first years rent as fees, this is in addition to taking the first month’s rent in its entirety. This will be the total fee. If, say, two agents are charging 10%, they split this between them. Estate agents selling commercial property (known as investment agents) typical charge 1% of the sale price.

The fees charged by residential Letting Agents are extremely variable, depending on whether the agent manages the property or simply arranges new tenants. Charges to prospective tenants can vary from zero to £300 in non-refundable fees usually described as “Application”, “Administration” or “Processing” fees (or all three). There are no guidelines for letting agents on charges except that they are forbidden by law to charge a fee for seeing a list of properties; otherwise, they are free to charge as they please.

The first month’s rent in advance plus a refundable bond (usually equal to a month’s rent) is also generally required. Most residential lettings in the UK are effected through a particular form of contract known as an “assured shorthold tenancy”. Assured Shorthold tenancies (generally referred to simply as “Shorthold”) give less statutory protection in terms of security of tenure than earlier, mostly obsolete, types of residential lettings. Shorthold Tenancy agreements are standard contracts generally available from legal stationers and the internet for around £1, the average lettings agent will charge £30 to provide such a contract.

Selling

Estate agents selling residential property generally charge between 1/2% to 4% of the sales price plus VAT, depending on the contractual arrangement and whether an individual firm has sole rights to the sale.