Why letting agent fees are rising under the Renters' Rights Act

Letting agent fees have started rising since the core changes in the Renters' Rights Act took effect on 1 May 2026, and the reason isn't incidental — it's structural. Agents have lost a recurring source of income and picked up a longer, more document-heavy process to replace it, and a growing share of landlords say they're already paying for it.

What changed on 1 May 2026

Two things happened at once. Section 21 was abolished, so Section 8 is now the only landlord-initiated route to possession, with sixteen defined grounds and a statutory notice period attached to each. And every assured tenancy became periodic from the outset — there's no fixed term, and so no renewal date. We've covered what the Act changed for a private landlord in full elsewhere; the short version is that both changes touch how a letting agent gets paid.

Why the renewal fee disappeared

A lot of agency fee structures were built around the fixed term: a commission when the tenancy started, then another when it renewed. With no fixed term and no renewal date, that second payment has nowhere to land.

Patrick Bullick, managing director of Stanley Property London, set the arithmetic out plainly in February 2026, before the Act took effect: without renewal commissions, an agency would have to charge much more — probably double — at the initial letting point to stay profitable. His own firm's answer was to take commission as the rent is collected, for as long as the tenant is in place, which he argued keeps the agency's interests pointing the same way as the landlord's. Different agents will land in different places, but the underlying arithmetic is the same for all of them: a revenue stream tied to renewals stopped working the day renewals stopped happening on a schedule.

Why the admin side got more expensive too

Losing Section 21 didn't just remove an option — it added process. A landlord now has to select the right ground under Section 8, serve the correct notice period for that ground, and in some cases wait longer before applying to court. Rent arrears is the clearest example: Ground 8 now needs at least three months' arrears and four weeks' notice, and the grounds for possession guidance sets out the same detail for the other fifteen.

A Goodlord survey of landlords reported in August 2026 found that 50% had already registered increased compliance work since the Act arrived, and 39% had adopted more cautious tenant vetting procedures. None of that work disappears when an agent does it instead of a landlord — it just gets billed differently.

What this looks like from a landlord's side

The same Goodlord research found that 23% of landlords have already seen their agency fees go up. That lands on top of an existing pattern: an earlier Goodlord report surveying 2,650 agents, landlords and tenants, covered by The Negotiator in April 2026, found 59% of landlords already named high fees and poor value as their biggest frustration with their agent, against just 6% who were very satisfied on value for money. A fee rise landing on top of that is not a small thing to absorb, and it's worth reading your own management agreement for what actually changes — and when — now that there is no renewal point to review it at.

The arithmetic, if you're weighing it up

We've set out the maths on agency fees in full in what a letting agent's 10% actually buys, but the shape of it is simple: on £1,000 a month in rent, a 10% fee is £1,200 a year. If that percentage — or the flat fee it's being converted to — is now higher than it was in April, the gap between paying for it and doing the process yourself has just got wider in one direction.

What a letting agent's fee buys, beyond the admin, is judgement calls and a buffer between you and the tenant relationship. What doesn't require an agent is the process itself: knowing what the compliance checklist contains and when each item is due, running a vetting process, generating and signing a tenancy agreement, and collecting rent on a proper record. That's the part Tenarize is built to do directly — it doesn't replace an agent's judgement, but it does replace the process work a rising fee is increasingly charging for.

Where to check this yourself

The official sources for what changed:

• Renters' Rights Act: an overview for landlords — GOV.UK
• Repossessing your privately rented property after 1 May 2026 — GOV.UK
• Grounds for possession: guidance for landlords and letting agents — every ground and its notice period
• Shelter and Citizens Advice — free, independent advice on a specific situation

The market figures above are industry research rather than official statistics, so they are worth reading at source:

• Goodlord landlord survey, reported by Letting Agent Today, August 2026 — the 23%, 50% and 39% figures
• Goodlord's 'Is Renting Broken?' report, covered by The Negotiator, April 2026 — the 2,650-person sample, and the 59% and 6% figures
• Patrick Bullick on the letting commission conundrum, The Negotiator, February 2026 — the agent's-eye view of the renewal income problem

If you're thinking about managing your properties directly instead, Tenarize is £15 a month for one to five properties, and the first month is free. The help centre is free to read either way.