Agent fees
Agent fees, more commonly called letting agent fees, are the charges a letting agent or managing agent invoices to a landlord for services such as finding tenants, conducting referencing, preparing tenancy agreements, collecting rent, and managing repairs. Under the Tenant Fees Act 2019, most up-front charges to tenants, for referencing, inventories, renewals, or check-out, are banned, so the cost of these services falls to the landlord. Letting agent fees are allowable expenses for UK tax purposes, meaning they can be deducted from rental income before calculating the taxable profit on your self-assessment return.
The three service tiers and typical costs
Letting agents in England and Wales typically offer three levels of service, each with a different fee structure:
Tenant-find only covers advertising, viewings, referencing, and setting up the tenancy. The fee is usually a one-off charge equivalent to one to two months' rent, or a percentage of the first year's rent (typically 8–12%). The landlord manages the tenancy from that point.
Rent collection adds monthly rent collection and arrears chasing to the tenant-find package. Fees are typically 5–8% of the monthly rent, charged on an ongoing basis.
Full management covers the complete day-to-day running of the tenancy, including maintenance coordination, periodic inspections, deposit handling, legal notices, and compliance oversight. Full management fees typically range from 10–15% of the monthly rent, with some London agents charging up to 20%.
Fee structures vary significantly. Agents who charge a lower percentage often apply higher set-up or renewal fees, and vice versa. Always request a written fee schedule inclusive of VAT before comparing quotes.
What the Tenant Fees Act 2019 means for landlords
The Tenant Fees Act 2019 prohibits letting agents and landlords from charging tenants for most services, including referencing, inventory preparation, tenancy agreement drafting, check-out reports, and renewal administration are all banned. Because agents can no longer recover these costs from tenants, they are either absorbed into the management fee or passed to the landlord as itemised charges. This means landlords who used agents before June 2019 may find their fee bills are higher than they previously were, even if the headline percentage has not changed.
Mandatory fee transparency and redress scheme membership
Before instructing an agent, it helps to understand what a letting agent does and which services you want to delegate. Once you know that, check two things that are legal requirements rather than good practice. Under Chapter 3 of Part 3 of the Consumer Rights Act 2015, agents must display a complete, itemised list of their fees prominently on their website and in any office where they deal with the public. An agent that does not publish a clear fee schedule is in breach of this requirement and can be fined by Trading Standards.
Agents must also belong to a government-approved redress scheme. The Property Ombudsman or the Property Redress Scheme, which is a legal requirement under the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme) (England) Order 2014. Membership gives landlords a route to independent complaint resolution if the relationship breaks down.
What to check before signing an agency agreement
From working with self-managing landlords across the UK, we find that fee disputes between landlords and agents most commonly arise from terms that were not clearly understood at the point of signing. Before committing, confirm:
The full fee schedule in writing, including VAT, and any charges that sit outside the headline percentage, for example renewal fees, inspection fees, tenancy preparation charges, and sale commission if the agent also acts as an estate agent
The notice period to terminate the agency agreement and whether an exit fee applies
How compliance responsibilities are divided, specifically, who registers the deposit, who conducts safety checks, and who serves prescribed information and notices
Excessive, hidden, or duplicated agent fees reduce net yield and can also create legal risk if they result in disguised prohibited payments to tenants. If you are managing your portfolio directly without an agent, costs associated with self-management, including software subscriptions, advertising, referencing services, are equally deductible as allowable expenses.
Landlords who self-manage with August avoid agency fees entirely, the platform handles rent tracking, maintenance reporting, document storage, and compliance reminders for a fraction of what full management typically costs.
For a detailed breakdown of what landlords typically pay across service types, including city-by-city benchmarks and a comparison of agent versus self-management costs, see our property management costs guide.
Frequently asked questions
Are letting agent fees tax-deductible?
Yes. HMRC classifies letting agent fees as allowable expenses under the property income rules, because they are incurred wholly and exclusively for the purpose of the rental business. This applies to tenant-find fees, ongoing management fees, and most ancillary charges. Keep all invoices as evidence for your self-assessment return.
Can a letting agent charge tenants fees?
Most tenant fees are banned under the Tenant Fees Act 2019. Agents can only charge tenants the rent, a capped refundable tenancy deposit, a capped holding deposit, and specific default payments (such as late rent charges or the cost of replacing a lost key). Anything outside that list is a prohibited payment.
Can I negotiate letting agent fees?
Yes, particularly if you own multiple properties or are offering a long-term management agreement. Renewal fees, charged each time a tenant extends, are a common area for negotiation. Always confirm any agreed reduction in writing before signing.
