Two agents quoting management fees of 11% and 12% are not necessarily one percentage point apart in what they’ll actually cost over a year. Here’s what to check before assuming the lower headline number is the better deal.
First: is the figure inclusive of VAT or plus VAT? This sounds like a technicality, but it’s a meaningful gap — a fee quoted as “12%” that turns out to be plus VAT is actually 14.4% once VAT is added. Convention in the Surrey market tends toward quoting figures inclusive of VAT, but not every agent follows that convention consistently, and it’s genuinely worth asking the direct question rather than assuming.
Second: what sits outside the headline percentage entirely? This is where the real cost differences often hide. Some agents charge a separate monthly compliance fee on top of the management percentage — a fixed amount added regardless of rent level. Some set minimum annual fees, which can run from several hundred to a couple of thousand pounds, and which quietly make an agent far more expensive than the headline percentage suggests on a lower-value property specifically, since the minimum kicks in regardless of what the percentage would otherwise work out to. Some charge renewal fees at each tenancy renewal point — though this matters less now that formal renewals are largely a thing of the past under periodic tenancies. Some charge exit fees if a landlord decides to leave. And some add a percentage markup on top of contractor invoices for any maintenance work carried out — an extra cost that isn’t visible anywhere in the headline management fee at all.
A concrete illustration of why this matters. A 12% agent with no additional charges can straightforwardly end up cheaper over a full year than an 11% agent carrying a £15-a-month compliance fee and a markup on maintenance invoices. The only way to know is to see the complete schedule, not just the number used in marketing.
What to actually ask for. Request the full fee schedule in writing, covering every charge that could apply over a normal year of management — not just the headline percentage, but compliance charges, minimum fees, renewal or exit fees, and the treatment of contractor invoices. Ask for it on a single page, in plain terms, before instructing.
What a reluctance to provide this tells you. An agent confident in their pricing structure will have this ready, because it’s a document they should already use internally. An agent who’s evasive about providing a complete written schedule, or who wants to talk through fees verbally rather than putting them in writing, is worth treating with more caution than the headline percentage alone would suggest.
Comparing letting agents on the single headline number is a bit like comparing mobile phone contracts on the monthly price alone, without checking what’s included. The number that matters is the total annual cost for a property broadly like yours, not the figure used in the advertising.
General information, not legal advice. Property Lounge, Guildford.
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