Fees, Transparency & Value: How Letting Agent Costs Actually Work

 
12/09/2025
Choosing a letting agent shouldn’t feel like decoding small print. This guide breaks down what you’re paying for, how services differ, and—most importantly—how good management reduces your total cost of ownership through lower voids, fewer compliance risks and tighter repair control.

The three common service levels (and what’s actually included)

1) Let-Only (Tenant-Find)

Best for: experienced landlords who’ll self-manage after move-in.
Usually includes:

  • Pricing advice, photos, listing on portals, tenant enquiries & viewings

  • Offers negotiation, referencing, Right to Rent checks

  • Tenancy agreement drafting & move-in documentation pack

  • First rent and deposit collection, then handover to you

Typically not included: ongoing repairs, rent collection, inspections, compliance renewals.

2) Rent Collection (Let-Only +)

Best for: hands-on landlords who want payment handling and arrears chasing.
Adds to Let-Only:

  • Monthly rent collection & statements

  • Early arrears reminders and escalation

  • Basic payment reconciliation

Usually not included: arranging repairs, inspections, compliance scheduling.

3) Fully Managed

Best for: landlords who want a lean, low-stress portfolio.
Adds to Rent Collection:

  • Repairs & contractor management (with agreed spending limits)

  • Mid-term inspections & reports

  • Compliance diary (Gas, EICR, alarms, licences) & renewals

  • Check-out, deposit adjudication, remarketing between tenancies

Often available as add-ons: inventory, professional photography, rent-guarantee, compliance audits, HMO advisory.

What drives the price?

  • Scope & time: tenant-find is a sprint; full management is ongoing.

  • Risk & compliance: agents carry operational risk (referencing, documentation, deposit handling).

  • Local expertise: correct pricing and marketing reduce days-to-let—often worth more than the fee difference.

  • Maintenance control: negotiated contractor rates, correct diagnosis, and “fix first visit” policies save real money.

Typical fee structures (illustrative)

  • Let-Only: fixed fee (e.g., one week’s rent + VAT) or a % of annual rent.

  • Rent Collection: small monthly % (e.g., 3–5% + VAT).

  • Fully Managed: monthly % (e.g., 8–12% + VAT) with optional add-ons priced separately.

  • Set-up/renewal fees: for marketing, AST drafting, compliance checks, and tenancy renewals where applicable.

Always check what’s included in each headline fee (photos, inventory, check-in/out, deposit registration, compliance pack, renewal negotiation). A lower % with lots of extras can cost more overall.

Where the value appears on your bottom line

1) Fewer void days

A correctly priced, well-presented listing with swift progression can shave 1–2 weeks off a re-let.
Example: £1,000 pcm rent → every week empty costs ~£230. If good marketing saves 10 days, that’s ~£330 saved—often exceeding the “fee difference” between service levels.

2) Stronger tenant fit

Robust referencing + clear tenancy terms = lower arrears risk and less churn. Even a 1% reduction in arrears across a year can outweigh a full-management uplift.

3) Controlled maintenance

Pre-approved spend limits, photo diagnostics and preferred rates keep costs predictable. Avoiding one unnecessary call-out (~£80–£120) or a mis-specified job can offset months of management fees.

4) Compliance protection

Missed Gas Safety or deposit deadlines can derail possession or trigger penalties. A managed compliance diary reduces those risks significantly.

How to compare agents in 5 questions

  1. What’s included at each level—and what costs extra? (Ask for a one-page matrix.)

  2. What’s your average days-to-let for similar properties in this area?

  3. How do you handle repairs? (Photos, diagnosis, SLAs, spend limits, contractor rates.)

  4. What’s your arrears process and typical recovery success?

  5. How will you keep me compliant? (Diary, reminders, certificates stored, licensing support.)

If the answers are vague, the service usually is too.

FAQs

Do I need fully managed?
If you live far away, are time-poor, or hold more than one property, fully managed usually pays for itself via fewer voids, tighter maintenance, and compliance admin handled.

Can I switch levels mid-tenancy?
Usually yes—e.g., start on Let-Only then bolt on Rent Collection/Management at renewal.

Are fees tax-deductible?
Management and letting fees are typically allowable expenses—speak to your accountant for personal advice.

 

 
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