I’ve been writing about UK property costs for long enough to notice a pattern: most people don’t realise how much letting agents actually charge until the invoice lands. A recent breakdown shows that on a typical £1,200-a-month rental property, landlords can easily pay £3,000 to £4,000 a year once you add the headline management percentage to all the smaller charges that slip under the radar. That’s a significant chunk of your rental income gone before you’ve even covered maintenance or mortgage costs.
The Tenant Fees Act 2019 changed the game for tenants — most of the old admin fees, referencing charges, and credit check costs are now banned. But here’s what I see people miss: those costs didn’t disappear. They just moved. Agents now charge landlords for services they used to bill tenants directly. If you’re a landlord, that means your bottom line has taken a quiet hit. If you’re a tenant, you need to know exactly what you can and cannot be asked to pay. Here’s what you actually need to know.
How letting agent fees actually work
The first thing to understand is that letting agent fees in the UK are not regulated. There’s no legal cap on what agents can charge landlords. That means the fee you’re quoted depends entirely on the agent, the location, and the type of property. A studio flat in Manchester will cost less to manage than a five-bedroom HMO in London, simply because the complexity is different.
Most agents offer three service tiers. The cheapest is tenant-find only, which typically costs one month’s rent as a flat fee. On a £1,200 property, that’s £1,200 per tenancy. The middle tier adds rent collection, usually 6–10% of monthly rent ongoing. The most expensive is full management at 8–15% of monthly rent — or up to 20% in London for premium properties or short lets. What I’d do in your shoes: ask for quotes from at least three agents and compare the full scope of services, not just the headline percentage. A 10% fee that includes everything might work out cheaper than an 8% fee that charges extra for every safety certificate and inspection.
What the Tenant Fees Act means for your wallet
The Tenant Fees Act 2019 came into force on 1 June 2019 in England and 1 September 2019 in Wales. It banned most of the fees that agents and landlords used to charge tenants. Referencing fees, admin fees, credit check fees, tenancy set-up fees, inventory fees, checkout fees, amendment fees, and mandatory professional cleaning requirements are all now illegal to charge to tenants. The practical effect for landlords is straightforward: costs that tenants used to cover now fall on you. Tenant referencing alone used to cost tenants £50–£150 per applicant. Agents now charge that to landlords instead.
For tenants, the rules are clear. You can only be charged: rent, a tenancy deposit capped at five weeks’ rent (six weeks if annual rent is £50,000 or more), a holding deposit capped at one week’s rent, default fees for late rent (after 14 days) or lost keys, and charges for changes you request to the tenancy. If an agent asks you for an admin fee or a referencing charge, that’s illegal. I’ve seen agents try it, especially with international tenants who don’t know the rules. If it happens to you, you can report it to the local trading standards office.
Where landlords and tenants get caught out
The most common mistake I see is landlords signing up for a management package without reading the small print on additional charges. Agents often charge separately for services that landlords assume are included. Here are the ones that trip people up most often.
Contractor invoice markups that inflate your costs
Some agents instruct their preferred contractors and add 10–20% to the invoice before passing it on to you. That means a £200 boiler repair suddenly costs £240. Over a year, with multiple repairs, this can add hundreds to your bill. The fix is simple: ask upfront whether the agent marks up contractor invoices. If they do, negotiate a cap or ask to approve any work over a certain amount before it’s done.
Void period fees when there’s no tenant
Some agents charge a reduced management fee during void periods — even when there’s no tenant, no rent being collected, and nothing meaningful being managed. This is one of those charges that feels unfair because you’re paying for a service that isn’t being provided. Check your contract carefully. If it includes a void period fee, ask for it to be removed before you sign.
Renewal fees that sneak up annually
Tenancy renewal fees typically cost £50–£200 per renewal. That’s a charge for drawing up a new tenancy agreement when the existing tenant stays put. Some agents charge this every six or twelve months without mentioning it upfront. If you’re a landlord with long-term tenants, those renewal fees add up fast. What I’d do: ask the agent to include renewals in the management fee rather than charging separately.
Tenants paying for things they shouldn’t
Despite the Tenant Fees Act, some agents still try to charge tenants for inventory reports, check-out fees, or professional cleaning. These are all banned. If you’re a tenant and an agent asks you to pay for any of these, you can politely point out that the Tenant Fees Act 2019 prohibits it. If they insist, contact your local council’s trading standards team.
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| Service | Typical Cost | Who Pays Now |
|---|---|---|
| Tenant referencing | £50–£150 per applicant | Landlord (was tenant) |
| Inventory report (studio/1-bed) | £80–£130 | Landlord (was tenant) |
| Check-out report | £70–£180 | Landlord (was tenant) |
| Tenancy renewal | £50–£200 per renewal | Landlord |
| Gas safety certificate coordination | £60–£100 (engineer) + £30–£75 (agent markup) | Landlord |
| Contractor invoice markup | 10–20% added to invoice | Landlord |
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How to compare letting agent quotes and avoid overpaying
Under the Consumer Rights Act 2015, letting agents must publish their full fee schedule transparently. That means you can — and should — ask for a complete breakdown before you sign anything. Here’s how to do it properly.
Get the full fee schedule in writing before you commit
Don’t rely on a verbal quote over the phone. Ask the agent to email you their complete fee schedule, including every charge they might apply during a tenancy. This should cover the management percentage, tenant-find fee, inventory costs, check-out fees, renewal fees, contractor markups, gas safety certificate coordination fees, deposit handling fees, and any charges for serving legal notices. If an agent hesitates or gives you a vague answer, that’s a red flag. A transparent agent will be happy to share everything upfront.
Compare the total annual cost, not just the percentage
A 10% management fee on a £1,200/month property costs £1,440 per year. But if that agent also charges £150 for an inventory, £100 for a check-out, £100 for a renewal, and adds 15% to contractor invoices, your real cost could be £2,000 or more. A 12% fee that includes all those extras might actually be cheaper. What I’d do: create a simple spreadsheet with the base fee plus all the likely add-ons for a typical year, then compare the totals side by side.
Negotiate the extras that don’t make sense
Some charges are negotiable. Void period fees, renewal fees, and contractor markups are the easiest to push back on. If an agent wants your business, they’ll often drop these or include them in the management fee. If you have multiple properties, you have even more leverage. Agents want portfolio landlords because they’re lower maintenance per property, so use that as a bargaining chip.
Check what happens during void periods
Void periods are when your property is empty between tenancies. Some agents charge a reduced management fee during this time, even though there’s no tenant to manage. Others waive the fee entirely. This matters because voids can last weeks or months. On a £1,200/month property with a 12% management fee, a two-month void costs you £288 in fees for nothing. Ask the agent to confirm their void period policy in writing before you sign.
Know what’s tax deductible
All letting agent fees you pay as a landlord are strictly allowable business expenses. That means they reduce your taxable rental income. If you’re a higher-rate taxpayer, every £100 in agent fees saves you £40 in tax. Keep all your invoices and receipts, and make sure your accountant knows what you’re paying. This doesn’t make the fees cheaper, but it does reduce the sting.
Consider whether you need full management at all
Full management is convenient, but it’s expensive. If you have a good tenant who pays on time and looks after the property, you might not need ongoing management. A tenant-find service followed by self-management could save you thousands over a few years. The trade-off is that you handle maintenance calls, inspections, and deposit returns yourself. If you live nearby and have a reliable tradesperson on speed dial, it’s worth considering. If you’re abroad or don’t have the time, full management is probably the right call.
What to do if you’re a tenant and something feels wrong
If an agent asks you to pay a fee that isn’t rent, a deposit, a holding deposit, or a default charge, it’s probably illegal under the Tenant Fees Act. You can check the government’s guidance online or contact Citizens Advice. If you’ve already paid a banned fee, you can apply to the First-tier Tribunal (Property Chamber) to get it back. The tribunal can order the agent to repay the fee and pay you compensation of up to five times the amount charged.
Can a letting agent charge me a referencing fee as a tenant? ▾
What happens if I pull out after paying a holding deposit? ▾
Are letting agent fees tax deductible for landlords? ▾
Can a landlord charge me for professional cleaning at the end of my tenancy? ▾
How do I find out what fees my letting agent charges? ▾
What’s the difference between a holding deposit and a tenancy deposit? ▾
The key takeaway is simple: letting agent fees vary wildly, and the headline percentage tells you very little about the real cost. Whether you’re a landlord choosing an agent or a tenant checking what you can be charged, the most important step is getting everything in writing before you commit. Start by asking for a full fee schedule, compare the total annual cost across at least three agents, and don’t be afraid to negotiate the extras that don’t add value. If this was useful, you might also want to read Check-In Fees: What Renters Should Know in the UK.
Sources and Further Reading
Lease Renewal vs New Lease: What Renters Should Know — A practical guide to understanding your options when your tenancy comes up for renewal, including what fees might apply.
Key Move-Out Steps to Follow When Renting in the UK — Covers the end-of-tenancy process, including deposit disputes and check-out procedures that tie directly to the fees discussed in this article.
How Much Do Letting Agents Charge?. British Property, 2026.
Letting Agent Fees: The Complete Guide. Self Landlord, 2026.
Letting Agent Fees: A Landlord’s Guide. Letting a Property, 2026.
