Tenants pay the price for estate agents' losses

22 October 2008
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The last couple of months have seen the value of houses plummet and the number of mortgage deals available dry up. This has in turn seen property sales pretty much grind to a standstill – to the detriment of estate agents who have, according to recent figures from RICS, only managed to make an average of two sales per month over the last quarter.
 
But while the fall in the housing market is bad news for anyone trying to sell their property and money-hungry estate agents, personally, as a prospective first-time buyer, I have been pleased to see prices slowly falling down to reasonable levels. At last, my wish to at some point down the line be able to buy a property could actually be plausible.
 
To be fair I’ve spared little thought for those ‘poor’ estate agents now struggling to make ends meet, thinking they’ve had their fair share of golden days when people were literally queuing outside their offices in the morning to buy a property. But, as with all businesses, if you can’t make money in one area you’ll have to find it somewhere else.
 
And as a tenant living in a flatshare I’ve recently found out how they are trying to make up for some of the losses. I have been living in the same flat for four years now and every time we have a change of sharer, the new tenant has been charged £200 + VAT for admin charges by our estate agent, who should remain nameless.
 
On top of this any prospective tenant has also had to fork out £25 for a credit check as well as stump up a hefty deposit of £750. Unfortunately, despite this humongous amount verging on the ridiculous it seems like this hasn't been enough to plug the deficit my estate agent is currently struggling with.
 
We now have a new girl moving in and, quel surprise, the £200 + VAT has now all of a sudden become £300 + VAT – an increase of 50%. And for what you might think? During my four years in the flat this amount has always stayed the same, and when querying my estate agent about the increase their answer was simply “the charge’s gone up”.
 
While they are being tight-lipped about it, the only reason I can see why it’s suddenly been hiked up with such an extortionate amount is the credit crunch.
 
Trying to explain that to my new flatmate hasn’t been easy however. She now has to pay well over a grand before she’s even stepped her foot into the flat, and is now contemplating eating beans on toast for the rest of the year. At least we’ve promised her a nice welcome dinner to take the edge of it!
 
Do you live in rented accommodation and have you suddenly seen your admin charges increase? If so, let us know your experiences below.
 

Johanna Gornitzki is the deputy editor of Moneywise