How Much Do Letting Agents Charge in the UK? A Comprehensive Guide for Landlords & Tenants in 2026

For landlords, the fees charged by letting agents form a significant operational cost when managing a property. The most common fee structure is a percentage of the monthly rent, but the exact percentage and what it covers can vary widely. Typically, a 'tenant find only' service, where the agent sources a tenant but the landlord manages the property thereafter, might charge between 50% and 100% of the first month's rent, plus VAT. This can include advertising, viewings, tenant referencing, and drawing up the initial tenancy agreement.

A more comprehensive 'full management' service, which is often preferred by landlords seeking a hands-off approach to their buy-to-let portfolio, usually incurs a higher percentage of the monthly rent, typically ranging from 10% to 20% plus VAT. This service usually encompasses everything in the tenant find service, plus ongoing rent collection, handling tenant queries, arranging maintenance and repairs (often with a small surcharge for managing these), conducting regular property inspections, and managing the deposit return process. For landlords focused on maximising rental yields, the difference between a 10% and a 15% management fee can be substantial over the lifetime of an investment. Some agents may also charge additional fees for services such as conducting an initial property valuation (often free), drawing up inventories (£100-£300), or arranging safety certificates like gas safety certificates (£60-£120).

The economic climate in 2026 continues to put pressure on both landlords and agents. With an increasing focus on ROI, landlords are scrutinising every expense. Agents are responding by offering more flexible packages. For instance, some may offer a lower percentage for longer-term contracts or for landlords with multiple properties. It's crucial for landlords to obtain a detailed breakdown of all potential fees, including any hidden costs, before agreeing to a contract. Understanding the specifics of what each fee covers will help ensure the agent's service aligns with the landlord's investment goals and contributes positively to their overall rental income.

The Tenant Fees Act 2019 significantly reshaped the landscape of tenant payments, aiming to make renting more affordable and transparent. In 2026, most of the fees that tenants were historically charged by letting agents are now illegal. The permitted payments that letting agents and landlords can lawfully charge tenants are strictly defined.

The main payments are:

• Rent: This remains the primary payment, agreed upon in the tenancy agreement.
• Tenancy Deposit: Capped at a maximum of five weeks' rent for annual rent under £50,000, and six weeks' rent for annual rent of £50,000 or over. This deposit is held to cover any damages to the property beyond normal wear and tear, or unpaid rent.
• Holding Deposit: Capped at one week's rent. This is paid to reserve the property while references are conducted. If the tenant pulls out or fails referencing due to their own actions, the landlord can retain this deposit. If the landlord or property is deemed unsuitable, or if the landlord withdraws the offer, the holding deposit must be returned.
• Default Fees: These apply if a tenant is late paying rent (after 14 days of the rent being due) or if they lose keys and need replacements. Late rent fees are capped at 3% above the Bank of England's base rate.
• Changes to the Tenancy Agreement: A reasonable charge, capped at £50 (or the landlord's actual cost if higher), can be made for requests to change the tenancy agreement at the tenant's request.

It is illegal for agents to charge tenants for services such as viewings, credit checks, referencing, inventory reports, or administration fees. Any agent found to be breaching the Tenant Fees Act can face significant fines. Tenants should be wary of any agent attempting to charge for services that are now prohibited. The focus in 2026 remains on ensuring fair practices and protecting tenants from excessive upfront costs, allowing them to allocate their finances towards rent and essential living expenses.

Selecting the right letting agent is a critical decision for any landlord, directly impacting the efficiency of managing a property and the profitability of their investment. By 2026, the market offers a spectrum of services, each with its own fee structure. It's not just about the lowest percentage; it's about the value and the specific needs of the landlord.

Landlords should first assess their own requirements. Do they have the time and expertise to manage repairs and tenant communication themselves? If so, a 'tenant find only' service might be cost-effective. However, for those with busy schedules or multiple properties, a 'full management' package offers peace of mind. When comparing agents, request detailed fee structures in writing. Don't hesitate to ask what is included in the management fee. For example, does it cover 24/7 emergency call-outs? Are there additional charges for organising maintenance work, and if so, what is the markup?

Consider the agent's local market knowledge. An agent with a strong understanding of local rental demand, average rents, and the specific characteristics of areas like Birmingham or Manchester, can help achieve optimal rental yields. For landlords investing in student accommodation, particularly in cities facing an undersupply of PBSA, an agent with expertise in this niche, including navigating HMO licensing and attracting international students, will be invaluable. Look for agents who can demonstrate their track record with statistics on void periods, rent arrears, and tenant retention. A well-managed property not only secures consistent rental income but also contributes positively to long-term capital appreciation. Ultimately, the cheapest agent isn't always the best; a slightly higher fee for superior service, expertise, and peace of mind can lead to a much better ROI.

The location and type of property can significantly influence how much letting agents charge. Prime city centres and highly desirable residential areas often command higher rents, and agents operating in these markets may charge a slightly higher percentage due to the perceived value of their service and the volume of transactions. For instance, agents managing properties in central London might have different fee structures compared to those in smaller towns, reflecting the higher property values and rental income potential.

Furthermore, the type of property plays a crucial role. Managing a single-family home is generally simpler than managing a multi-let property, such as a House in Multiple Occupation (HMO). Agents specialising in HMOs, which require more complex management due to multiple tenants, stricter regulations, and often higher maintenance needs, may charge a higher percentage or specific fees related to compliance and management. Similarly, the burgeoning market for purpose-built student accommodation (PBSA) presents unique challenges. These properties often involve managing communal areas, higher tenant turnover, and specific marketing strategies to attract international students. This specialised knowledge means agents in this sector might have adjusted fee models. The persistent bed shortage in many university cities further amplifies the demand for well-managed student housing, allowing specialised agents to command fees that reflect their expertise.

For investors looking at the wider property market, understanding these locational and property-type nuances is key. An agent who is highly effective in managing buy-to-let properties in areas with strong rental yields and good prospects for capital appreciation will be worth their weight in gold, regardless of a slightly higher management fee. By 2026, we expect to see agents further specialising in niche markets, offering tailored services and pricing that reflects the specific demands and risks associated with different property types and locations, thereby optimising investment returns for landlords.