Understanding Letting Agent Fees for Landlords in the UK

Wiki Article

If you’re a property owner looking to rent out your home or investment property, understanding letting agent fees for landlords is essential. These fees can significantly affect your rental income and budgeting, so it’s important to know what services are included, how they are calculated, and what legal rules apply. Let’s break down everything you need to know about landlord fees in the UK.

What Are Letting Agent Fees?

Letting agent fees are payments made by landlords to property agents in exchange for services related to renting out a property. These services can range from finding tenants to fully managing the property on the landlord’s behalf. Since the Tenant Fees Act 2019 in England restricted most charges to tenants, landlords now bear the majority of letting costs.

The fees vary depending on the service level you choose. Agents generally offer three main tiers: Tenant-Finding (Let Only), Rent Collection, and Fully Managed Services.

Tenant-Finding (Let Only)

A tenant-finding service is ideal for landlords who want to manage the property themselves after the tenant moves in. The agent will handle marketing, conduct viewings, reference tenants, complete Right to Rent checks, prepare the tenancy agreement, and take the first month’s rent and deposit. After this stage, ongoing management responsibilities, including repairs and compliance, fall to the landlord.

The typical cost for this service is around 7% of the first year’s rent plus VAT, depending on the agency and location. One-off fees are often charged based on the rental value of the property, which allows landlords to budget more accurately.

Rent Collection Services

For landlords who want assistance in collecting rent but still wish to manage maintenance themselves, rent collection services are an attractive option. In addition to everything included in a let-only package, the agent collects monthly rent, issues statements, and chases arrears. This service usually costs around 9% of the monthly rent plus VAT.

Rent collection services give landlords peace of mind that rental income is managed professionally while still maintaining control over repairs and property upkeep.

Fully Managed Services

Fully managed services offer complete property management, including all the responsibilities of the lower tiers plus coordinating repairs, scheduling compliance checks such as Gas Safety, EICR, and EPC inspections, conducting periodic inspections, handling deposit disputes, and providing guidance on serving legal notices.

This service is typically charged at 10–15% of monthly rent plus VAT, with the exact percentage depending on property location, size, and complexity. London properties and HMOs generally fall at the higher end of the range due to extra management requirements.

What Influences Letting Agent Fees?

Several factors determine how much a landlord pays an agent:

• Property Type: HMOs, flats, or multiple occupancy properties usually cost more to manage.

• Location: Prime London areas often incur higher fees than other regions.

• Additional Services: Marketing campaigns, professional photography, floor plans, virtual tours, inventory checks, legal notices, and compliance certifications all add to the total cost.

• Ongoing Management Needs: Regular inspections, maintenance coordination, and tenant disputes increase fees.

Understanding these variables helps landlords choose the right level of service and budget accordingly.

How Agents Calculate Fees

Agents typically charge either a fixed fee or a percentage of the rent. For example, a fully managed London property renting for £1,800 per month at 12% would cost £216 plus 20% VAT, totaling £259.20 monthly. Alternatively, a let-only service at 7% of the first year’s rent would be a one-off fee of £1,814.40 including VAT.

This transparent pricing model allows landlords to compare service levels and make informed decisions about which agent and service are best for their property.

Legal Considerations for Landlords

The Tenant Fees Act 2019 means landlords are responsible for legitimate letting costs while ensuring tenants are not overcharged. Additionally, Right to Rent checks, updated in 2025, are mandatory for landlords or their agents. Failure to comply can lead to legal penalties and fines.

Why Choosing an Agent Makes Sense

Using a letting agent saves landlords time and ensures compliance with regulations, especially for larger portfolios. Agents help reduce void periods, maintain property standards, manage tenant communication, and ensure all compliance requirements are met.

Agencies like Cribs Estates Ltd have structured fee tiers, offering clear and affordable options for landlords: Let Only at 7% plus VAT, Rent Collection at 9% plus VAT, and Fully Managed services at 12% plus VAT. Additional services such as HMO licence applications or legal notices are charged separately, helping landlords plan and avoid unexpected costs.

Conclusion

Understanding letting agent fees for landlords is key to protecting your rental income and ensuring smooth property management. By choosing the right service level and working with a professional agency, landlords can stay compliant, maximise rental returns, and focus on growing their property portfolio. Whether you are managing one property or a full portfolio, professional guidance ensures your investment remains profitable and legally secure.