Letting Agents must Value their Worth
In an increasingly regulated and demanding private rented sector, letting agents are under pressure to deliver more, often for less.
Legislative reform, a higher level of enforcement, rising operational costs and growing client expectations have reshaped the role of the modern letting agent. Against this backdrop, it is both timely and necessary for agents to reassess how their services are valued and how their fee structures reflect the true scope of their professional responsibilities.
The Evolving Role of the Letting Agent
The traditional perception of a letting agent as merely a facilitator of viewings and rent collection is no longer fit for purpose. Today’s letting agent operates a property management service, regulatory compliance, risk management and client advisory services. This includes and is not limited to, navigating complex legal frameworks, ensuring ongoing compliance with safety and licensing requirements, managing tenant expectations, handling disputes, and responding to local authority intervention where necessary.
Each of these functions carries professional risk, time commitment and accountability. Yet, fee structures have not always kept pace, leaving many letting agents undervaluing their expertise and absorbing increasing.
Why Fee Structures Matter
A clear, robust and transparent fee structure is not simply a commercial necessity; it is a professional safeguard. Fees that accurately reflect the services provided enable agents to:
Invest in staff training
Obtain compliance expertise
Maintain high operational standards
Allocate sufficient time to proactive property management
Protect their business against regulatory and financial risk
Under-pricing services can lead to cutting corners, poor customer service and increased exposure to enforcement action or reputational damage. Landlords increasingly put letting agents under pressure to drop their fees even though they can offset all fees paid to the agent as a business expense.
Consider this –
the average rent per calendar month is £1500.00 per calendar month (pcm)
the letting agent’s fee is 10% pcm
the landlord is paying £150.00 pcm
the day rate is £4.93
In the scenario above, the landlord could face and RRO of £36,000.00, a situation that could be avoided by using an agent who has expertise, a clear understanding of changes in legislation, strong processes and systems in place and a well-trained team.
Does asking a letting agent to REDUCE their fee make good business sense given the agent will be the gatekeeper, comfort blanket, safety net to keep the landlord’s biggest asset and business compliant?
Valuing one’s worth does not equate to ramping up fee, on the contrary, transparency is key.
Landlords will be more receptive to changes in fee structures when they clearly understand what they are paying for and why those services matter.
Well-drafted terms of business, a clear schedule of services and regular communication all contribute to a professional relationship built on trust and mutual understanding.
When landlords recognise the agent as a knowledgeable, compliance-led partner rather than a cost to be minimised, fee discussions become far more constructive.