The three main levels of service
Most letting agents offer some version of three services. The names vary, but the idea is the same. Tenant find (sometimes called let only). The agent markets your property, carries out viewings, references the tenant and sets up the tenancy. After that, you manage the property yourself. This is usually a one-off fee. Rent collection. As well as finding the tenant, the agent collects the rent each month and chases late payments. Repairs, maintenance and day-to-day questions from the tenant usually stay with you. Full management. The agent does all of the above and also acts as the point of contact for your tenants, organises repairs and maintenance, and keeps you updated. For many landlords, especially those with busy lives or more than one property, this is the service that takes the headache away.Typical letting agent fees in the UK
There is no official price list, and fees vary by area, agent and property. As a rough guide, recent UK industry guides suggest: Tenant find: typically around 8% to 12% of the first year’s rent plus VAT, or roughly one month’s rent, charged as a one-off fee. Rent collection: typically somewhere around 3% to 12% of the monthly rent plus VAT. Full management: typically around 10% to 15% of the monthly rent plus VAT for many agents, which works out at roughly 12% to 18% once VAT is added. Some larger agents charge more. These are broad market ranges, not fixed prices, and individual quotes can sit above or below them. The most useful thing you can do is compare quotes for the same level of service, on the same basis.Why “+ VAT” matters when you compare quotes
Letting agent fees are normally subject to VAT at 20%. Some agents quote their percentage before VAT and some include it, so two quotes that look similar can be quite different in practice. Always check whether a figure includes VAT before you compare it with another. Here is a simple worked example. Say your property lets for £1,000 a month and your agent charges 7% + VAT for full management:- 7% of £1,000 is £70
- VAT at 20% on £70 is £14
- So the monthly fee is £84, or £1,008 over a year