Are letting agents too expensive? What are the alternatives?

For many landlords, using a letting agent seems like the only choice.

They advertise your property, find prospective tenants, arrange viewings, carry out referencing and, if you choose a managed service, deal with the tenant and property on your behalf.

But all of that comes at a high cost.

Depending on the service and agent, landlords can face extortionate finding fees, ongoing management fees and additional charges for things such as inventories, renewals or maintenance.

In many cases, you end up paying for services you don't need, or ones that could be provided more effectively elsewhere.

So the question isn't necessarily about whether letting agents are providing value.

It's about whether every landlord needs to pay for every service a traditional letting agent offers.

What are you actually paying a letting agent for?

Before deciding whether an agent is expensive, it's worth looking at what you actually pay them for.

They would normally provide some/all of the following:

• Advertising your property
• Responding to tenant enquiries
• Arranging and conducting viewings
• Referencing prospective tenants
• Carrying out Right to Rent checks
• Preparing tenancy agreements
• Collecting rent
• Handling maintenance and repairs
• Communicating with tenants
• Dealing with tenancy issues
• Keeping up with changes to rental legislation

If you live far away from your tenants, own multiple properties or simply don't want to deal with tenants, this can be extremely valuable.

But what about if you live locally, have one or two properties and are perfectly happy managing the tenancy yourself?

You may not need all of those services.

And that's where the alternatives become interesting.

You don't necessarily have to choose between full management and doing everything yourself

Traditionally, landlords have often been presented with a relatively simple choice.

Use a letting agent and let them handle it.

Or:

Do everything yourself.

But there are other options.

1. Full property management

This is the most hands-off option.

The agent typically deals with finding the tenant and then continues managing the property throughout the tenancy.

For those who don't want to deal with tenants, maintenance or day-to-day management, this can be convenient.

The trade-off is that you're paying for that convenience, often through an ongoing management fee.

2. Tenant finding / let-only

Instead of paying an agent to manage the property indefinitely, a landlord can use an agent to help find a tenant and then take over the management themselves.

This can make sense for those who are comfortable dealing with their own tenants but don't want to handle advertising, enquiries, viewings and tenant qualification themselves.

3. Do it yourself

Some choose to manage the entire process themselves.

This gives maximum control and avoids paying an agent for services they could carry out themselves.

However, it also means taking responsibility for everything from marketing the property and dealing with enquiries to understanding the legal requirements involved in letting a property.

For some, the time involved simply isn't worth it.

4. A more flexible approach

There is also a middle ground.

Instead of automatically paying for a standard package, you can look at which parts of the process you actually need help with.

For example, some might want professional help finding and qualifying a tenant but be perfectly happy managing the property once the tenancy begins.

Others might want help with management but already have their own system for finding tenants.

The important thing is each landlord is in a different situation.

How much can the costs add up?

It's easy to underestimate the impact of an ongoing, percentage-based management fee.

Imagine a property renting for £1,200 per month.

If a landlord were paying a hypothetical 10% management fee, that would be:

£120 per month

or

£1,440 per year.

Over three years, that would be £4,320, before considering any additional charges.

That doesn't automatically mean the fee is unreasonable.

If the agent is saving the landlord significant amounts of time, handling problems and providing a service the landlord genuinely needs, the cost may be worthwhile.

But if the landlord is already comfortable managing their property themselves, it's reasonable to ask whether an ongoing percentage of the rent is necessary.

The cheapest option isn't necessarily the best option

It's also important not to fall into the opposite trap.

Choosing the cheapest possible service isn't automatically the right decision either.

A good but more expensive letting agent can save landlords considerably more time and help deal with complicated situations better.

There can also be significant legal responsibilities involved in letting a property, so landlords should understand exactly what they are taking on before deciding to manage a property themselves.

The real question shouldn't be:

“What's the cheapest way to let my property?”

It is:

“What help do I actually need?”

So what could a different approach look like?

This is the idea behind Fairlylet.

Rather than assuming every landlord needs the same package, the aim is to provide a more flexible and transparent approach.

A landlord might simply need help finding the right tenant.

Another might want additional support with the tenancy.

The important thing is to start with the landlord's requirements rather than automatically putting them into a standard package.

That can include helping landlords find suitable tenants, qualifying prospective tenants and providing additional services where they are genuinely useful.

We are not suggesting that traditional letting agents have no value.

We are instead questioning whether one standard approach works for every landlord.

What should landlords ask before choosing a letting service?

Before signing up with any letting agent or property service, it is worth asking:

• "What am I actually paying for?"
• "Do I need full management or simply help finding a tenant?"
• "Are the fees fixed or percentage-based?"
• "Are there additional charges on top of the advertised fee?"
• "How much involvement do I want in managing my property?"
• "Could I manage some parts myself?"
• "What would I realistically save in time by using an agent?"

These questions make it much easier to correctly compare different options.

There isn't one right answer for every landlord

For some landlords, full management will be exactly what they need.

For others, paying an ongoing management fee may not make sense when they are perfectly capable of managing their own property.

And for others, the ideal solution may be somewhere in between.

The important thing is having a choice.

At Fairlylet, the idea is simple: We give you that choice.

Because letting a property doesn't have to be one-size-fits-all.