Are letting agent fees fair? How much should I pay and why?

publication date: Aug 15, 2014
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Letting agent fees, are they fair?

This is a tough question as it is very rare for any industry to charge both the customer and their client for help, so the idea of charging both tenants and landlords does seem quite unfair when you first look at it. It’s also hard if the landlord asks you to leave so you have to pay moving costs and more fees to an agent to find a new property through no fault of your own.

Choosing the right letting agent 
Making sure you avoid rogue landlords!

However, unfortunately there are things that a letting agent needs to do which are in the interest of tenants rather than landlords, so the theory goes these are better charged to tenants. Sadly, due to often poorly communicated fees by many letting agents, they can come as a shock to tenants who don’t find out what they owe until they are about sign their tenancy agreement.

What fees do agents charge?
Fees to tenants are usually for things like:-

  1. Credit checks to make sure you can afford the property, this might include letters from your bank and/or your employer and to make sure you don’t have any bad debts registered against you

  2. An administration fee to process the paperwork and things like change utility bills into the tenants name

  3. Time taken to help tenants understand their rights and responsibilities when renting a property

  4. Securing a guarantor if required

  5. Cancelling scheduled property visits at the last minute


Another charge which actually isn’t really a fee, is the deposit. This is often 4-6 weeks of your rent. So if your rent is £1,000 per month, that would be just under £1,000 to just under £1,400 on top of the fees above.

Some agents also charge you for either a check-in or a check-out or inventory. The rationale is this protects both of you, so one pays at the start of a tenancy, the other at the end of the tenancy.

How much should tenants pay? 
Looking at charges for tenants, the main problem is they do vary dramatically from £50 up to over £1,000. This makes it very difficult for tenants to know what is a ‘fair price’ to pay an agent.


Talking to different agents, most seem to charge around £50-£100 in areas where rents are quite low, charges then rise up to £250 in good quality areas outside of London and up to £300 in London. This usually includes credit checks and the administration to change account details and seek a guarantor as well as explain rights and responsibilities to you. In addition you may have to pay for a check-in, check-out and/or an inventory.

All agents BY LAW have to provide you these fees UPFRONT so be very suspicious and challenge any agent who charges you more than this as it may be you are paying unfair costs to rent a property.

See Kate’s property calculation page

However, this money, by law, must for tenants on assured shorthold tenancy agreements be protected in a government approved tenancy deposit scheme.

Some agents charge tenants for:-

  1. Part of the tenancy agreement

  2. A check-in or check-out

  3. An inventory

  4. Renewing your tenancy agreement

  5. Late rent charges


Some agents just charge one fee and bar renewals or late rent charges, don’t charge anything else.

A lot of the charges depend on the area and property type. The more expensive a property and area, the more likely you as a tenant will want changes to things like the tenancy agreement, so it may well be you have to contribute. Large private landlords though are unlikely to adjust their agreement, so they don’t necessarily charge tenants anything at all, but you also don’t always get the flexibility you do with an individual landlord.

Choosing the right letting agent 
Making sure you avoid rogue landlords!

Landlord charges
The main charges for landlords are:-

  1. The set-up fee

  2. The on-going management commission

In my experience, those that charge low commission rates eg 5%, typically charge lots for a set-up fee and services such as gas safety or electrical certificates, cleaning etc. Those who charge around 10% outside of London and 15% in London tend to have reasonable set-up fees and good value ‘service’ fees too, so don’t just ‘buy’ based on commission.

How to choose a good letting agent 

Don’t be taken in by ‘cheap commission’ deals 
Ideally always turn the commission rate into money. 10% of £600 rent is £60 a month – not much to pay considering you pass most of the legal risk onto the letting agent as well as the hassle of dealing with tenants. Plus this is tax deductible, so if you are a 20% tax payer, the fee is actually £48 per month.


Other charges though you do need to know about and to watch out for – before you sign any terms and conditions with the agent – these include:-

  • Inventory
  • Check in and check out 
  • Renewal fees
  • Tenancy agreement 
  • Property visits over and above management required
  • Handling insurance claims 
  • Dealing with eviction
  • Court appearances


A good agent though will be able to give you a list of these fees upfront, on one or two sheets of paper – prior to signing. If they can’t, don’t use them, plenty of good agents will be keen to secure your business.

For more information about choosing the right letting agent and avoiding the bad guys visit:-


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Which? Property books and one of the UK's top property experts.
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