As a landlord, you might be wondering how much letting agents charge for their services – and if they are worth it.
Costs are often a major factor for first-time landlords, who want to make sure that they get as much for their money as possible, especially when considering the rising costs of maintenance, the complexity of compliance rules and the time drain of tenant finding.
We explore how much letting agents generally charge landlords for their services, from the most basic packages to their full management services.
That way, you can make a clear assessment before outsourcing your property management.
The average cost of letting agents in the UK
When discussing the average cost of letting agent services, you need to weigh up the different services offered. Each of these services many vary in exactly what they offer, but the GBP costs are calculated according to the average rent in the UK, as described by ONS data from June 2024 – which is £1,262 pcm.
Many landlords opt for tenant finding/partial management services, which tends to cost them between 8-15% of the monthly rent, with some variation depending upon exactly what is included.
Let’s take a look at each one in turn…
How much do different letting agent services cost?
1. Tenant finding only service
This is the most common and basic service offered. Letting agents will find tenants for the landlord, performing vetting procedures and checks to assess whether they would make a good tenant – and then onboarding them.
Services commonly included within tenant-finding services:
- Property marketing (online listings, photos, descriptions)
- Conducting viewings
- Tenant referencing (credit checks, employment, rental history)
- Right to Rent checks
- Drafting and signing tenancy agreements
- Collects rent payment and deposit – at beginning of tenancy
- Setting up standing order for rent payments
- Handing over keys to the tenant
Average costs of tenant finding services: 8–12% (assumed average rent: £1,262 pcm). £1,211–£1,817 charged as a one-off fee.
2. Partial property management (often named as ‘rent collection’)
This is a halfway service. The agent will find tenants for the property, and then will undertake other services on an ongoing basis, like rent collection, inventory and ongoing communication with the tenant. These services tend to be flexible, and available on an ‘add-on’ basis through many agents, who let landlords pay for a basic package and then bolt on extras afterwards.
Services commonly included within partial property management services:
- Rent collection and statements
- Chasing the tenant’s rent arrears (when necessary)
- Routine property inspections (often quarterly)
- Organising property maintenance and repairs
- Handling tenant queries & complaints
- Serving legal notices when needed (e.g., Section 21, Section 8)
Average costs of partial property management: 10–15% (assumed average rent: £1,262 pcm). £126–£189 per month.
3. Full property management
Full property management, as the name suggests, is where the letting agent manages every aspect of the property (so far as they are legally required and allowed to do so). You can expect extra services, such as check-in/out, full communication with tenants, sending notices, handling compliance documentation, dealing with minor maintenance as part of the package. And more.
Services commonly included within full property management services:
- 24/7 emergency maintenance handling
- Arranging and overseeing property repairs
- Conducting check-in and check-out inspections
- Handling deposit disputes and deductions
- Negotiating and arranging tenancy renewals
- Liaising with utility providers and councils where necessary
- Compliance management help (arranging gas safety checks, EPC, EICR, etc.)
Average costs of full property management: 12–18% (assumed average rent: £1,262 pcm). £151–£227 per month.
4. Guaranteed rent services
This service is not offered by all agents, but it adds a layer of protection on top of full management and generally lasts for a longer period of time. Guaranteed rent services normally offer full management, as well as guaranteeing each month’s rent, whether the tenant pays or not. They often offer eviction help (including with costs) as well.
It works by ‘leasing’ your property to the agency for a period of time – often 2-5 years – and they essentially become the tenant responsible for paying you. They make money by charging the tenant a bit more than the amount of money they pay to lease the property. The agent takes an equivalent to a high percentage of the monthly rent.
Services commonly included within guaranteed rent services (building on full management):
- Fixed monthly rent payment to the landlord (even if property is vacant)
- Full tenant sourcing and total management
- Covering tenant arrears and void periods where needed
- Property inspections and maintenance coordination on a regular basis
- End-of-tenancy repairs and re-letting arrangements
Average costs of guaranteed rent services: 20–30% (assumed average rent: £1,262 pcm). The agent takes approximately £252–£379 per month, meaning the landlord receives £883–£1,010 per month in guaranteed rent.
The add-on services letting agents offer
In addition to services that are charged per calendar month, most letting agencies offer ‘bolt-ons which are charged as one-off costs – if and when they are needed by landlords. These are worth considering, along with their typical prices, so that you can understand the potential cost in different circumstances.
Here are some approximate costs of some common bolt-on services – you will need to check specific letting agencies for exact costs, which may be higher or lower in various instances.
- Professional photography & floor plans – £75 to £250
- Energy Performance Certificate (EPC) – £50 to £120
- Gas Safety Certificate – £60 to £150
- Electrical Installation Condition Report (EICR) – £100 to £300
- Inventory check-in/check-out reports – £80 to £250 (varies by property size)
- Deposit protection registration – £30 to £50
- Tenancy agreement renewal fee – £50 to £150
- Serving eviction notices (Section 21, Section 8) – £75 to £200
- Court and eviction support – £500 to £1,500+ (depending on legal complexity)
- Legionella risk assessment – £40 to £100
- Rent guarantee insurance – £100 to £300 per year
- Additional property inspections – £50 to £150 per visit
Are letting agent fees tax deductible in the UK?
Yes, they are. This is important to consider when evaluating the fees charged. Letting agent fees are an allowable expense for landlords on their yearly tax returns, which goes some way to offsetting the costs.
Are online letting agents a cheaper option?
Online letting agencies and hybrid agents can often be cheaper – in the same way as they are for estate agency services. However, you will likely be restricted in the services you can choose and in the quality of the services offered. They are more likely to handle the paperwork and marketing aspects of your property rather than (obviously), the in-person services of doing an inventory or inspecting your property.
What to consider when paying for property management services
It’s a serious matter to weigh up the different services and their incumbent costs as a landlord. You don’t simply have to do your finances, you also have to consider the other benefits, losses, time costs and other constraints you’re going to face.
Here’s a few examples…
Have I got time to manage my property without paying for letting services?
Time is a massive constraint. Especially if you’re a part time landlord who has a day job, and intends to let property on the side. If you choose not to use a letting agent, you can expect to spend 1-10hrs a week on your property, depending on issues that arise and if you’re having problems with your tenants. It could be much more time, however, if you make bad choices with regard to tenants, or get fined for forgetting key landlord responsibilities.
Do you want to be a hands-off or hands-on landlord?
This is a related issue. If you aspire to become a landlord and manage a portfolio full-time, dedicating much of your week to it, you may well forego lettings costs initially as you have time to spend on management.
That said, the larger your portfolio gets, the more need you’ll have to outsource the work so that you can focus on new investments and growing your business. So, even if you can afford the initial time-cost, it makes sense in the long term to acquire some management help.
Can I afford letting agency fees without harming my rental income?
If you’re letting property for the first time, you have to be prepared for a significant cut to your profits when taking on lettings services. But, this can lead to costs saved if they procure you suitable tenants who stay for the long term and look after your rental property.
So, you will at least need to consider short-term affordability for your property, even if lettings help is likely to be a wise move in the long-term.
Do I know how to market property effectively on my own?
There’s a reason why tenant-finding services are the most commonly offered. Void periods cost a lot, and landlords have to jump through hoops to advertise on Rightmove/Zoopla on their own. Not only that, but letting agents have a whole marketing system in place to reach tenants, from their email systems to Google Ads, their websites and widely followed social media accounts.
If you choose to go it alone, you will need to be confident that you can find good tenants within an acceptable timeframe. If not, it’s probably better to hire a letting agent – at least for this initial stage – so you can start letting your property as soon as possible and making a rental income.
Letting agent charges for landlords – conclusion
The most important point to consider is the level of service that suits you now, and for the long term. Work out what you actually need and find a letting agent that offers this for a competitive price, and with the experience and customer testimonials to back up their service. A local agent who understands the property market you’re in is essential, ensuring that they pick the right tenants for your property and market it correctly.
If you follow those guidelines, you are likely to invest wisely in letting agency services which provide long term value for the management fees paid.
