Choosing a Letting Agent: What to Check

If you pick the right agent, you are paying 8-15% for a compliance officer, rent chaser, and project manager. If you pick badly, you are paying that for a postbox and some Rightmove photos.

"This guide provides general information about UK landlord tax obligations. It is not financial or legal advice. Tax treatment depends on your individual circumstances and may change. Consider consulting a qualified accountant or solicitor for advice specific to your situation."

1. What agents actually do and what it costs

Service levels

Most agents sell three tiers:

Tenant-find only

• Advertise, do viewings, reference tenants, draft AST, collect first rent and deposit, then hand over.
• You manage everything after move-in.

Rent collection

• Tenant-find plus collecting rent and chasing arrears.
• You handle repairs, inspections, and most day-to-day issues.

Full management

• Tenant-find, rent collection, repairs, inspections, compliance reminders, dealing with most tenant queries.

Typical fees in 2025-26

Across the UK:

• Tenant-find only: 50-100% of first month's rent or 8-12% of first year's rent as a one-off fee.
• Rent collection: 3-8% of monthly rent.
• Full management: 8-15% of monthly rent, sometimes higher in London or for HMOs.

All of these are plus VAT at 20% unless they explicitly say otherwise.

Example at GBP 1,200/month rent (2025-26):

• Full management at 12% = GBP 144/month = GBP 1,728/year.
• That is the real number you are deciding against self-management.

Remember: Tenant Fees Act 2019 banned almost all fees to tenants in England, so those costs are loaded onto you instead.

2. What to check before you sign with an agent

Legal and professional basics

• Client Money Protection (CMP) -- mandatory in England since April 2019 for any agent holding client money under the Client Money Protection Schemes for Property Agents Regulations 2019.
• Ask: "Which CMP scheme are you in?" and look for a certificate.
• Redress scheme membership -- agents must belong to a government-approved redress scheme under the Estate Agents Act 1979 and later regulations.
• Professional body (optional but reassuring) -- ARLA Propertymark, RICS, UKALA etc. Not mandatory but good for standards and complaints processes.
• Professional indemnity insurance -- ask for proof. CMP schemes usually require it.

Then check:

• Who actually holds deposits (agent or scheme direct).
• How fast they pass rent to you after tenants pay.
• Their staff: how many actual property managers, not just negotiators.

If they cannot answer CMP and redress questions clearly, walk away.

3. The management agreement: key clauses and traps

You should read the management agreement with the same care you read a mortgage offer.

Must-have clarity

Notice period

• How long to terminate management (eg 1-3 months).
• Can you end just management without paying a penalty if the tenant stays? Many agreements try to lock in ongoing fees for as long as the tenant remains, even if you switch agent or self-manage.

Services included vs extras

• What is actually covered by the 8-15%: inspections, rent chasing, Section 13 notices, licensing applications?
• What triggers extra charges (eg court attendance, major works admin).

Maintenance authority

• Spend limit without your consent (eg GBP 200-300 is common).
• How you approve bigger jobs and which contractors they use.

Maintenance mark-ups

• Many agents add 10-15% on top of contractor invoices as a "management fee". Check if this exists and whether it is capped.

Rent guarantee

• Is "rent guarantee" actually an insurance policy, and does it require their referencing and strict processes?
• Check exclusions (eg Covid-type events, certain tenant types, missed inspections).

Compliance responsibilities

• The contract should spell out who arranges gas certs, EICRs, EPCs, and how they remind you.
• It should be clear that you stay legally responsible, even if they admin it.

Red flags in agreements

• Renewal fees or "management fees" payable even if they no longer manage but the same tenant stays.
• Very long tie-in periods (eg 24 months unbreakable).
• Huge charges for simple admin (eg GBP 150+VAT to serve a Section 13, or to re-issue a tenancy agreement that is mostly templated).
• Clauses that let them spend any amount on repairs without your consent, or that force you to use their contractors for everything.

4. Online vs high-street agents and when full management is worth it

High-street agents

Pros:

• Local office, local knowledge.
• Often better at getting busy professionals through the door quickly.

Cons:

• Typically higher full management fees (often 10-15%+VAT).
• More likely to have legacy fee structures and mark-ups.

Online / hybrid agents

Pros:

• Lower management fee, eg 8-12% or fixed monthly fees.
• Clearer fee schedules in many cases.

Cons:

• Less local "hands on" presence.
• Quality is variable: some are excellent, others are call-centres.

When full management is worth the cost

It usually makes sense if:

• You live far from the property.
• You have a full-on day job and do not want evening calls about leaks.
• You are unsure about legal changes (Renters' Rights Act, new safety regs).
• It is an HMO / complex property and you want someone to manage licensing and inspections.

It is less compelling if:

• You live nearby.
• You are comfortable with compliance and process.
• The margin is already thin after mortgage and costs.

A common compromise: agent does tenant-find and setup, you self-manage after the first 6-12 months once you see how it runs.

5. Switching agents and what happens to the tenancy

You can normally:

• Terminate the management agreement by giving the contractual notice and paying any agreed exit fee.
• Keep the same tenancy agreement and tenant -- the tenancy is between you and the tenant, not the agent.

When you switch:

The new agent (or you) should get:

• Copy of the tenancy agreement.
• Deposit scheme details and login.
• Compliance docs (gas, EICR, EPC, licence).
• Rent schedule and arrears position.

If the outgoing agent protected the deposit in their own name/ID with DPS/MyDeposits/TDS, you either:

• Transfer it to your own/your new agent's account within the same scheme, or
• Refund and re-protect according to scheme rules.

You must also:

• Tell the tenant about the change: where to pay rent, who to contact for repairs.

Do not wait until you are in dispute with the agent to check the notice clause and deposit arrangements.

6. Biggest letting agent red flags and common complaints

Red flags

• No clear answer on CMP or refusal to show a certificate.
• Not on any redress scheme or professional body.
• Vague about fees: "we will sort that later".
• More focused on charging landlord add-ons than on getting good tenants.
• Reluctant to put everything in writing or to give you a full fee schedule.

Common landlord complaints

• Poor communication -- radio silence about repairs, viewings, or arrears.
• Weak tenant selection -- rushing referencing to fill the property, then you carry arrears and damage.
• Hidden fees -- charging for things you assumed were included (tenancy renewals, inspections, serving notices).
• Over-ordering works -- approving expensive repairs without consulting you, sometimes with mark-ups.
• Compliance slip-ups -- forgetting gas certs, deposit protection, or service of prescribed docs, leaving you exposed when you try to evict.

Under the Tenant Fees Act 2019, the days of agents charging tenants for every bit of admin are gone in England, so some agents try to recoup by stacking landlord fees instead.

7. What forums get wrong about using agents

Misconceptions you see a lot:

"Any agent will do, it is all the same 10%." Reality: a strong agent can save you more than their fee in reduced voids, better rents, and fewer legal mistakes. A bad one is worse than no agent.

"The Tenant Fees Act means agents are cheap now." Reality: the Act bans most tenant fees, not landlord fees. If anything, landlord fee pressure increased after 2019.

"Agents are legally responsible, so if they mess up, you are safe." Reality: you remain the landlord in law. If your agent forgets to protect a deposit or renew a gas cert, you can still face penalties, failed possession claims, or rent repayment orders.

"Online agents cannot manage properly." Reality: some online / hybrid agents run very tight processes at lower cost. Some high-street agents are a single overworked negotiator. The badge on the door matters less than their systems and track record.

If you treat choosing an agent like recruiting a business partner, check their regulation status, interrogate the management agreement, and run the numbers against your net rent, you will get far better value than picking whoever is nearest the property.

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