Guaranteed rent
Guaranteed Rent vs a Letting Agent: Which Works Better for London Landlords?
Most London landlords start with a letting agent. But once you add up fees, empty weeks and repair bills, the rent you actually keep can be well below the headline figure. Here's how a traditional agent compares with guaranteed rent.
How each option works
With a letting agent, you let to a tenant on a standard tenancy. A fully managed service typically charges a percentage of the rent each month, plus set-up and other fees. You still pay for repairs, and you carry the cost of any empty periods between tenants.
With guaranteed rent, a company leases the property from you for a fixed term and pays you an agreed rent every month. The company carries the void risk and handles maintenance, so your income is fixed.
Side by side
| Guaranteed rent | Letting agent (fully managed) | |
|---|---|---|
| Monthly income | Fixed | Rent minus fees, until a void |
| Management fees | None | Usually a percentage of rent, plus VAT |
| Void periods | Operator's risk | Your risk |
| Routine maintenance | Handled by operator | You pay; agent arranges |
| Agreement | Company let, fixed 1–5 years | Rolling tenancy; tenant can leave on 2 months' notice |
| Your time | Almost none | Some: approvals, decisions, renewals |
A worked example
The figures below are illustrative only, to show how the costs stack up. Your own numbers will depend on the property.
Imagine a two-bedroom London flat that would let for £2,400 a month on a standard tenancy.
- Agency fee: at 12% plus VAT (14.4%), that's about £346 a month, or £4,147 a year.
- Voids: three empty weeks a year costs roughly £1,660.
- Repairs and call-outs: say £1,000 a year.
From a headline £28,800 a year, the landlord keeps around £21,990, before mortgage, insurance and tax. On guaranteed rent, an agreed figure of, for example, £1,950 a month would give a fixed £23,400 with no fees, no voids and no repair bills to budget for.
Whether guaranteed rent comes out ahead depends on the figure you're offered, so always compare it against what you actually keep today, not the headline rent.
Since the Renters' Rights Act
From 1 May 2026, new tenancies in England are rolling assured tenancies with no fixed term, so a tenant can leave on two months' notice. For some landlords that makes a fixed-term company let more attractive. We cover the changes in our Renters' Rights Act guide.
Which should you choose?
A letting agent can make sense if you want a long-term tenant and are comfortable with some variation in income. Guaranteed rent suits landlords who want certainty, a fixed term and no day-to-day involvement. The best way to decide is to put real numbers side by side: ask us for a free valuation and compare it with your current net income.