Landlords contracting lettings agents to rent out their properties are apparently paying around £1bn per year on renewal fees  according to a property-tech lettings company.

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Renewal fees do vary and the average, including VAT, is around 8.5 per cent and so for instance a London rent of £2,500 a month means landlords are paying an extra £2,550 fee to agents for current tenants renewals, which the property-tech company calls ‘money for nothing’.

A spokesperson for the company, said: “For too long, high street agents have taken advantage of landlords by charging fees for things that just aren’t fair – especially renewal fees.

“It’s crazy to think that landlords are handing over this kind of money every time their tenants simply choose to stay in their home for another year.

“Punishing landlords for having a great property that people want to remain in is just absurd. Inevitably, these renewal fees get passed onto tenants through increased rents which many landlords need to do to make it viable for them. So, in reality, both the landlords and tenants are the ones who suffer, while the letting agents’ revenues continue to soar.

“We are determined to put a stop to this and that’s why today we are launching our “Stop Renewals Fee” campaign to educate landlords and let them know there is a better way so we can change lettings for good.”