What does a letting agent do

A letting agent is a professional intermediary who acts on behalf of a landlord to let and, depending on the service level agreed, manage a residential rental property. Their role ranges from a one-off tenant-finding service to full day-to-day property management on the landlord's behalf. Under UK law, all letting agents operating in England must belong to a government-approved redress scheme and hold any client money in a protected account under the Client Money Protection Schemes for Property Agents Regulations 2019.

The three service tiers

Tenant find only. The agent markets the property, conducts viewings, references applicants, collects the holding deposit, and draws up the tenancy agreement. Once the tenant moves in, all ongoing management passes back to the landlord. This is the lowest-cost option, typically charged as a one-off fee of 50–100% of the first month's rent, or 8–12% of the annual rent, depending on the agent.

Rent collection. Adds ongoing rent collection and arrears chasing to the tenant find function. The agent collects rent from the tenant and remits it to the landlord, less their fee, and handles initial late-payment contact. Day-to-day management of the property, repairs, inspections, compliance, remains the landlord's responsibility. Typical cost: 5–10% of monthly rent on top of the tenant find fee.

Full management. The agent handles everything: marketing, referencing, tenancy set-up, rent collection, maintenance coordination, periodic property inspections, compliance obligations including gas safety and electrical safety certificates, and day-to-day tenant queries. Full management typically costs 10–20% of the monthly rent, with higher rates in London and lower rates in regional markets. For a full breakdown of typical fee structures by service tier, city and agent type, see our guide to property management costs in the UK.

Where the instruction is solely for ongoing management of an existing tenancy rather than tenant-finding, the term managing agent is more commonly used, though many agents offer both functions under the same agreement.

What letting agents are legally required to do

Under the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, all letting agents operating in the course of a business must be a member of an approved redress scheme — currently either the Property Ombudsman or the Property Redress Scheme. Any agent that handles client money must also belong to a government-approved client money protection scheme under the Client Money Protection Schemes for Property Agents Regulations 2019. Both requirements are enforced by local authorities, which gained enhanced investigatory powers over letting agents from 27 December 2025 under the Renters' Rights Act 2025.

Letting agents must display their fees transparently on their website and in branch. They cannot charge tenants for fees prohibited under the Tenant Fees Act 2019, such as referencing, administration, inventory or check-out charges, all such costs must be absorbed by the landlord or the agent.

Under the Renters' Rights Act 2025, letting agents must ensure the official Renters' Rights Act Information Sheet 2026 is served on tenants, and from Phase 2 of implementation they will be required to register their landlord clients and properties on the Private Rented Sector Database.

The landlord's retained liability

Instructing a letting agent does not transfer the landlord's legal responsibility to the agent. If an agent fails to protect a tenancy deposit, serve prescribed information correctly, carry out a right to rent check, or ensure required safety certificates are obtained, the landlord can still face penalties, rent repayment orders or restrictions on regaining possession. This is one of the most consequential misunderstandings among landlords who use full management services: handing over management does not hand over accountability.

From working with self-managing landlords across the UK, we find this point is consistently underestimated. Landlords who instruct agents frequently discover at the point of a dispute, a deposit claim, a possession application, an Environmental Health inspection, that they have signed a management agreement that delegated the task but not the liability.

How to choose a letting agent

When selecting a letting agent, landlords should verify the following before instructing:

Redress scheme membership. Check whether the agent belongs to the Property Ombudsman or the Property Redress Scheme. Both maintain public registers.

Client money protection. Confirm the agent is a member of a government-authorised CMP scheme. This protects client money in the event the agency becomes insolvent.

Professional body membership. Membership of ARLA Propertymark, RICS, or the NRLA-affiliated body signals adherence to a professional code of practice, though it is not a legal requirement in England.

Fee transparency. By law, agents must publish a full schedule of fees. Request an itemised schedule including VAT, and ask specifically about renewal fees, inventory fees and check-out charges that the headline percentage does not always cover.

References and track record. Ask for references from existing landlord clients, particularly on how the agent handled maintenance issues and deposit disputes.

Self-managing as an alternative

Many landlords, particularly those with one to five properties, find that self-managing with the right tools is more cost-effective and gives greater control than using a full management agent. The recurring agent margin on a £1,200/month property at 12% amounts to £1,728 per year: a material sum against which purpose-built landlord software is a small fraction of the cost.

Landlords who self-manage with August get rent tracking, compliance reminders, document storage, maintenance reporting, and Making Tax Digital record-keeping in one place, covering the functions a full management agent would otherwise handle.

Frequently asked questions

Do I have to use a letting agent to rent my property?

No. Landlords in England are not legally required to use a letting agent. You can self-manage, provided you carry out your own right to rent checks, protect the deposit in an approved scheme, comply with safety certificate obligations, and follow the correct procedures for rent increases and possession under the Renters' Rights Act 2025. Letting agents are a commercial choice, not a statutory requirement.

What is the difference between a letting agent and a managing agent?

Both terms are sometimes used interchangeably, but letting agent more commonly describes the tenant-finding and tenancy set-up function, while managing agent typically refers to ongoing day-to-day property management after the tenancy has begun. Many agencies offer both services under the same instruction.

Are letting agent fees tax-deductible?

Yes. Letting agent fees paid by a landlord are allowable expenses against rental income for Self Assessment purposes, provided they are incurred wholly and exclusively for the letting business. Both the tenant find fee and ongoing management fees qualify.

What happens if my letting agent makes a mistake?

The landlord retains legal liability for statutory obligations regardless of whether an agent was instructed to carry them out. If the agent's error causes the landlord financial loss, the landlord's recourse is against the agent, either through the agent's professional indemnity insurance, the approved redress scheme, or the courts. The landlord cannot use an agent's failure as a defence in possession proceedings or regulatory enforcement.