Two years ago nobody thought of online letting agents as a serious competitors to high street letting agents. There was Zoopla and Rightmove to handle the bulk of online searches for property to rent.
And, they still do, however, with the rise of technology and people’s access to internet from their pocket, sticking your face in some agent’s glass window became a rather obnoxious activity. It’s much easier to view listings on your phone now, en route to work or at your brake.
Even the media started “predicting” the fall of traditional property agents. Well, high-street letting agents are not so easily weeded out, but have certainly made some room for new online players.
In this post, we’ll discuss how online letting agents and brick-and-mortar letting agents differ and where are each one’s strong and weak points.
Yay: Online letting agents are cheap
Over at Upad’s website, the only fee listed for tenants is a referencing fee – £75, however, it also says that it’s conducted only upon a landlord’s request, so finding a property to rent through their website can be completely free for tenants.
On the landlord’s side, there are small fees for advertising the property in a huge list of online property portals, including Rightmove, Prime Location and Zoopla.
Foxtons, who is considered to be one of the cherries on a huge cage of letting agents, has a whole bunch of fees listed in their terms and conditions page.
- Starting off, they charge each tenant £420 inc VAT upon a successful tenancy agreement.
- If you decide at any point to move out and find a replacement tenant to take up on your tenancy, Foxtons will charge you another £300 inc VAT for drafting the new tenancy agreement.
- Every time the agency has to send you a letter about late or non-payment of rent or administration charges, that’s another £60 inc VAT.
- For referencing there is a £35 inc VAT fee charged upon request.
- Renewal fees are listed for £96 inc VAT per renewal.
- If you move out earlier than your fixed term, you need to pay rent until either the tenancy ends or a new tenant is found – whichever is earlier. If a tenant is found, you will still owe 13.2% incl. VAT out of the remaining months until the fixed term ends.
So, that’s a very very long list of expenses for a tenant. They come on top of your monthly rent and deposit. Foxtons is known to not include any garbage fees for things that should not be the tenant’s responsibility at all, like deposit protection and inventory checks.
However, many tenants will testify not all letting agent are anywhere near “noble”.
On the landlord’s side Foxtons chargers around 20.4% of their annual rent for finding a tenant and fully managing the property. Additional work, like deposit protection and obtaining other important documents is charged separately.
Note: The Tenants’ Voice does not endorse neither Upad or Foxtons in any way. They are just used as examples for bigger names in their according category.
Nay: Online letting agents lack local knowledge
One of the few redeeming qualities of high-street letting agent is their prized local expertise. Indeed, property brokers who serve from a physical location are very knowledgeable about the surrounding areas, the available properties, the perks and downsides to each location.
Renters looking for a new home can often just list a bunch of criteria and the letting agent would find them a bunch of properties that fit. Agents can guide and advise you on finding the perfect property.
Online letting agents can’t really do that. Operating entirely on the digital front, most often the “agent” doesn’t really know anything about the property, aside from the general information that is listed online. Maybe, they have a script and general knowledge about most of the boroughs in London, but not much more.
Online letting agents also don’t accompany you on your viewings. They instead refer you to deal directly with the landlord which can be a good or a bad thing depending on the situation.
In any case, going for an online letting agent, you must rely almost entirely on your own ability to judge a property from its online listing. Sometimes it would be a complete waste of time, but this is the drawback from going cheap.
Yay: Online letting agents have more responsive support
They have technology on their side. Online letting agents use software to manage all tenants and landlords.
The software can automate quite a lot of the grunt work, store all important documents and information about the given tenancy in a single account and can optimise the workload so essential work is processed first and all parties receive their response in due time.
Aside from the actual technology, online letting agents usually operate from a single building with a dedicated support team who monitors all phones, chats and emails 24/7. This allows you to get information and assistance almost instantly.
With office letting agents you need to confine with normal office hours, which is hard if you work full time and also travel back and forth.
Nay: Online letting agents don’t offer face to face service
Some online letting agents also offer property management to landlords. To do this, they handle the administration side and use third party providers to handle onsite work, like inspections, inventories, repairs, etc.
Interesting enough, some of the biggest brands of traditional agents also outsource these tasks to external providers.
So the quality of this side work is probably on par for both types.
What online letting agents lack is a store-front, a physical location you can visit and voice your concerns. Most of the time, you’d not care for a single bit about this, since it’s more convenient for you to handle your tenancy online as well.
Except for when you have a big problem. Having a physical location in which you can strut in and demand resolution to your problem is a big plus.
Both online and traditional letting agents have benefits and drawbacks worth considering. Which one is better will depend on your needs and situation. The Tenants’ Voice recommends to consider all options and contact at least one provider of each to compare which solution will work best for your case.
Check out your landlord’s point of view as well. “The Landlord” has a great summary of some of the most prominent online letting agents, so go take a peak.