What It Costs to Start a Letting Agency: A Line-by-Line Budget

Start-up budgets for letting agencies online tend to give a few round totals and no workings. This one does the opposite. It lists every line, gives the official fee where a regulator publishes one, and tells you where you need to get a quote because the price depends on you.

This post is about money. For how to run the business from your spare room (the address, meetings, looking credible) see how to start a letting agency from home.

It is general information, not legal, tax or financial advice. Fees below were checked on the official pages named, in September 2026. They change, so check them again before you pay.

Three set-ups, one list

Your costs depend less on how many properties you have than on where you work from:

• From home: no premises, a laptop, your car.
• Small office: a serviced office or a room above a shop, not open to passing trade.
• High street: a shopfront, signage and someone behind the desk.

Everything else is the same list with different answers. Work down it once for the set-up you are considering.

Legal and registration costs

These are the lines where the law, or a regulator, sets the terms.

A few notes on these:

• Redress. The two approved schemes listed on gov.uk are The Property Ombudsman and the Property Redress Scheme. Not joining can mean a fine of up to £5,000 (gov.uk, as above).
• CMP. Six approved schemes are listed on gov.uk. Failing to join when you must can mean a fine of up to £30,000 (gov.uk, as above). If you are unsure whether you hold client money, ask a scheme, and describe exactly what money passes through your account.
• ICO. The ICO says tier 1 is for a turnover of up to £632,000 or no more than 10 staff, so check which tier your agency falls in.
• HMRC. The threshold is per let, not per portfolio: HMRC's guidance on letting agency businesses applies it to rents of €10,000 or more a month (gov.uk, Money laundering supervision for letting agency businesses, checked September 2026). If none of your lets reach that, this line may be nil, but check the guidance yourself.
• Wales and Scotland add their own licensing and registration: Rent Smart Wales and the Scottish letting agent register. Both have fees and training requirements; the home-based guide covers who needs them.

Insurance

• Professional indemnity. Covers claims that your advice or service caused a client loss. Your redress or CMP scheme may set conditions on cover, so ask them what they need before you buy.
• Public liability. Covers injury or damage at a viewing or in your office.
• Office and contents, and business use on your car insurance, depending on your set-up.

There is no official price for any of these. Get two or three quotes, and tell each broker exactly what you do (let-only, fully managed, holding money or not).

Portals

Ask each portal for a quote for your own agency. For a sense of the scale at the top end: the average Rightmove agency advertiser paid £1,636 a month in the first half of 2026, up on a year earlier (Rightmove plc, Half-year Financial Report, 31 July 2026). That is an average per advertiser, which is usually a branch, across agencies of every size. It is not what a new one-person agency would be quoted, so ask each portal for its own price.

The alternatives at the start are to advertise through a per-listing or landlord-facing service, or to rely on your own website and local marketing until you have enough stock to justify a subscription. Each has trade-offs, so weigh the quote against how many enquiries you expect it to bring you.

Software

At 0 to 30 properties, you need fewer tools than vendor websites suggest. Split the list into what you need from day one and what can wait:

Every one of these has a published or quoted price. Put the actual quotes in the budget, not a guess.

Marketing

• Brand: a logo and colours. This can be simple.
• Local: leaflets, a board supplier for To Let boards (and whether your council has rules on them), local sponsorship.
• Online: your website, a Google Business Profile, social accounts. Mostly time, not money.

Break-even, with your own numbers

You do not need anyone's average to work this out. You need four numbers of your own:

1. Your monthly fixed costs: add up every monthly line above.
2. Your one-off costs, spread over the months you want to recover them in.
3. What you earn per property per month. For a managed property, your management fee. For let-only, your letting fee divided by the months until that property relets.
4. Your own drawings: what you need to live on.

Then: (fixed costs + one-off costs per month + drawings) ÷ earnings per property per month = the number of properties you need.

Run it for each set-up. Comparing the home answer with the high-street one shows you what the premises have to earn.

Where Loftfolio fits

Loftfolio covers one line in the software table: a lettings website with the applicant pipeline built in. It is US$39, US$99 or US$249 a month depending on the plan, charged in US dollars and excluding any VAT, with no contract, no minimum term and no setup fee. Starter is one person, Pro three, Agency ten, and ten people on Agency is US$249 a month in total, not each.

It does not replace the other lines. It is not a portal and does not send listings to them, and it does not do referencing, e-signature, rent collection or client accounting. The full list is on what Loftfolio does not do.

Add up your own numbers

The spend calculator lets you enter each line above, for your chosen set-up, and see the monthly and first-year totals. Put your quotes in, not ours.

Related: Letting agency software: a buyer’s guide; Letting agency website design.