Many landlords start out taking a hands-on approach to property management. After all, building a relationship with tenants and helping them feel at home in a property can be extremely rewarding. As their portfolios grows however, the logistics of managing and maintaining multiple properties can place a real drain on their time and energy.

As such, a growing number of landlords are considering a transition to managed lettings. While a 2021 government survey revealed that almost one in five landlords used managed services, a 2023 survey by USwitch suggested that around two-thirds of landlords expressed an interest in managed lettings.
In this article, we explore the services letting agents offer, the typical fees involved, and what to look out for when choosing the right level of support.

Landlord Property Management Services Explained

Landlords choose property management services for a number of reasons. Common examples include a lack of time or ability to carry out repairs and maintenance, limited knowledge of the market and whether they’re charging the right amount, not wanting to deal with the logistics of finding reliable tenants, and anxiety about meeting the right legal requirements.
Fortunately, UK letting agencies offer a plethora of services that landlords can choose from and tailor to their needs. These include:
  • Tenant-find: Where the agent advertises the property, handles viewings and manages tenant applications and screening, with the landlord taking care of the rest.
  • Rent collection: The agent collects rent from tenants and chases any late payments.
  • Full property management: This offers a more holistic approach, usually including advertising the property, tenant screening, maintenance, repairs, and regular inspections. Perhaps most crucially, it ensures your property remains compliant with the ever-expanding web of regulations – from Energy Performance Certificates (EPC) and Electrical Installation Condition Reports (EICR) to the hundreds of other legal requirements that carry significant penalties for non-compliance.

 

What Are The Average Letting Agent Fees For Landlords?

Fees typically range from 10% to 15% of monthly rent collections, although this may depend on the location and level of service provided. It’s worth noting that these percentages often operate on a sliding scale based on the number of properties under management. Landlords with larger portfolios may be able to negotiate more favourable rates.
Also keep in mind that agent fees are tax-deductible and allowable expenses under HMRC guidelines. They can therefore be offset against rental income, reducing tax liability. This tax benefit can significantly offset the cost of professional management services, making them more financially viable than they might initially appear.

Breaking Down The Fee Structure

The fee structure for letting agents can vary considerably between providers. Some agents charge a flat percentage for all services, whilst others break down their charges based on specific service elements.
Tenant-find services typically involve a one-off fee, often equivalent to one month’s rent or a fixed sum of several hundred pounds. This covers property marketing, viewings, tenant referencing, and the preparation of tenancy agreements.
Rent collection services usually command a fee of around 5-7% of the monthly rent, covering the administrative aspects of financial management without the broader responsibilities of full property management.
Full management services, as the most comprehensive option, naturally command the highest fees, typically ranging from 10-15% of the monthly rent. This covers everything from tenant sourcing to ongoing property maintenance, emergency call-outs, and regulatory compliance checks.

What Do Landlord Property Management Services Include?

It’s important to note that there is no legally defined standard for what a letting agent’s fee can or should include. This lack of standardisation means that landlords must scrutinise the specific services included in any management package. Low-cost agents may seem initially enticing at first, but they may only offer basic services with extra charges for inspections, compliance, repairs or tenant communications that can quickly add up.
When comparing agent fees, landlords should interrogate the scope of service to make sure that they are comparing like for like. For example, tenant-find services, while cheaper, leave landlords responsible for ongoing issues like rent collection, maintenance, and legal compliance. This can become particularly challenging for landlords managing properties from a distance or those with multiple commitments.
Full management relieves landlords of these responsibilities, making it a good option for time-poor landlords hoping to make the leap from operators to investors. This comprehensive service often includes regular property inspections, which not only satisfy insurance requirements but also allow for early identification of maintenance issues before they escalate into costly problems.

Long-Term Value Over Cost-Cutting

While some landlords may wish to cut monthly costs, especially in a challenging economy, they should be cautious of adopting cost-cutting measures that ultimately prove counterproductive. The apparent savings from opting for budget management services or self-management can quickly evaporate when faced with prolonged vacancies, problem tenants, or maintenance issues that escalate due to delayed attention.
Agents who focus on transparency, good tenant service and proactive property management often deliver more stable returns, with less risk of expensive disruptions, disputes or compliance issues. Quality property management can lead to better tenant retention rates, reducing costly void periods and the expenses associated with finding new tenants.

How Can We Help?

In conclusion, while the cost of professional letting services represents a significant consideration for landlords, the value delivered through comprehensive management, regulatory compliance, and tenant satisfaction often justifies the investment
At Slater & Brandley, Nottingham’s leading independent letting agents, we prioritise transparency and trust. Our services are tailored to meet your needs, ensuring no hidden costs – just straightforward, professional property management. Contact our team today to learn more!
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