Why Letting Agent Fees Could Be Eating Into Your Yield — And How Homesty’s £40 Tenancy Fee Can Help You Grow

Whether you're a first-time landlord or managing a growing portfolio, every percentage point of yield counts. Yet one of the most overlooked threats to rental profitability is the traditional letting agent fee—often a percentage of rent, charged monthly, regardless of your involvement.

At Homesty, we charge a flat £40 fee for the entire tenancy—no commissions, no hidden extras. And with our free Yield Calculator, you can quickly see how that compares over time.

Let’s explore why fixed fees matter, how percentage-based costs eat into your returns, and how much you could save over the lifetime of your investment.

What Do Letting Agents Typically Charge?

Letting agents in the UK usually operate on two main pricing models:

• Let-only: A one-time fee, often between £500 and £1,500

• Fully managed: Ongoing monthly fees of 10–15% of rent, rising to 20% in London
  (Source: Letting a Property, Landlord Studio)

While the percentage may seem modest, these fees scale with rent—meaning as your rents rise, so do your costs.

Homesty’s Flat Fee Model

At Homesty, we charge £40 per tenancy, regardless of how long the tenants stay or how much the rent is.

That’s it. No monthly deductions. No renewal fees. No commissions.

With this predictable, low cost, your yield stays high—and your margins stay yours.

Example: How Agent Fees Impact Your Net Yield

Using the Homesty Yield Calculator, we’ve run a sample investment:

• Property Price: £250,000

• Monthly Rent: £1,200 (£14,400 annually)

• Annual Costs: £2,000

• Letting Agent Fee: 10% of rent (£1,440)

• Homesty Fee: £40 (fixed)

Results:

Urban vs Rural Investment: Why Fixed Fees Help Everywhere

(Source: CityRise, Wise)

In lower-yield areas like London, every 0.5% in costs can make or break your investment.

In higher-yield regions like the North West, percentage-based agent fees scale quickly—reducing what should be high returns.

That’s where flat fees shine: predictable cost, maximum control, no surprise deductions.

From Fee Savings to Portfolio Growth

Let’s be clear—this isn’t just about saving money for the sake of it. Every pound not spent on letting agent fees is capital that can be reinvested into your portfolio.

Example: 3 Properties, 10 Years

Imagine you own 3 rental properties, each generating £14,400 in annual rent. At a typical 10% agent fee, you’d pay:

• £1,440 per property, per year

• That’s £4,320 annually across 3 properties

• Over 10 years: £43,200 in fees

Now compare that to Homesty’s £40 flat fee per tenancy:

• £120 total per year across 3 properties

• 10-year cost: £1,200

• 10-year saving: over £42,000

That’s a deposit on a fourth property—or a major renovation to increase your rental value across the board.

Example: Scaling from 1 to 5 Properties

• If you save £1,400/year using Homesty (vs a traditional agent), you’ve saved £7,000 in five years

• Pair that with your retained rental profit, and you’ve potentially built enough for another buy-to-let deposit of 10% on a £70,000–£100,000 property

In short: lower fees increase net income, which accelerates your ability to:

• Pay off mortgages faster

• Increase cash reserves

• Fund your next deposit

• Upgrade existing properties

• Exit the market on stronger terms

Why Flat Fees Support Long-Term Wealth

Traditional letting fees are linked to rent—but they don’t scale with your effort or intention. That means:

• The more successful your investment, the more they take

• The longer your tenants stay, the more you still pay

Homesty flips that model on its head. By charging just £40 per tenancy, we give landlords a reliable, low-cost foundation to grow on their terms, not ours.

For serious investors, this isn’t just an admin preference—it’s a growth strategy.

Final Thought: Your Next Property Might Already Be in Your Fees

Letting agents serve a purpose. But if you're paying thousands a year in fees—money that could fund your next purchase, refurb project, or early retirement—it’s worth asking:

Are you growing their business, or yours?

Homesty is designed to support landlords who want to reinvest, expand, and build a sustainable property income—without letting their profits leak away.