What Are the Costs of Letting a Property in London?

If you are letting a property in London for the first time, or simply want to plan your budget properly, it helps to see the full picture before the income starts arriving. Rent is only one side of the equation. On the other side sits a set of costs, some one-off and some recurring, that every landlord needs to account for. None of them are unusual or alarming, but understanding them clearly from the outset means there are no surprises later and your figures are realistic from day one.

Letting agent fees

Most London landlords use an agent for at least part of the process, and the fee depends on how much you want them to do. A let-only service, where the agent finds and references a tenant and then hands the tenancy back to you, costs less than full management, where the agent handles the day-to-day running of the let throughout the term. The difference is real and worth thinking through carefully, which is why we set it out in detail in our guide to let-only versus full management.

Fees are usually quoted as a percentage of the rent plus VAT, and they vary between agents and according to the level of service. If you want to understand exactly what a managing agent does for that fee, our explainer on full property management walks through the work involved, from rent collection and statements to arranging repairs and compliance. The right choice depends on how hands-on you want to be and how close you live to the property.

Compliance certificates and safety

Some of the most predictable costs are the safety requirements that come with letting any home legally. You will need a valid Energy Performance Certificate to market and let the property; the minimum rating to let is currently E, and an EPC lasts ten years, so this is an occasional rather than annual cost.

Gas and electrical safety are ongoing. Where there are gas appliances, you need an annual Gas Safety Record from a Gas Safe registered engineer, given to the tenant. The fixed electrical installation must have an Electrical Installation Condition Report at least every five years. You will also need a smoke alarm on every storey and a carbon monoxide alarm in any room with a fixed combustion appliance. These checks are straightforward to budget for once you know the cadence, and keeping on top of them protects both your tenant and your position as a landlord.

Getting the property ready to let

Before a tenant moves in, most properties need some preparation. This might be a professional clean, minor decoration, a few repairs, or replacing tired items so the home shows well and lets at a competitive level. A well-presented property tends to find a tenant more readily, and the speed of that process matters to your bottom line, as we explore in how long it takes to let a property in London.

It is also sensible to budget for an inventory and check-in report at the start of the tenancy. A clear, dated record of the property's condition protects everyone and makes the eventual check-out far smoother, particularly when it comes to the deposit.

Deposits, redress and registration

You can ask a tenant for a deposit, which is capped at five weeks' rent where the annual rent is under £50,000, or six weeks' rent where the annual rent is £50,000 or more. The deposit is the tenant's money held in trust, not income, and it must be protected in a government-approved scheme within 30 days, with the prescribed information given to the tenant.

Under the Renters' Rights Act 2025, landlords must also join a government-approved redress or ombudsman scheme and register on the new Private Rented Sector Database. These obligations are part of the wider reforms now in force, and our overview of what the Renters' Rights Act means for London landlords sets out the changes worth knowing before you let. It is also worth remembering that rent increases are now limited to once a year, by a Section 13 notice with at least two months' written notice, which the tenant can challenge at the First-tier Tribunal.

Maintenance and the unexpected

Every property needs upkeep, and a sensible landlord sets aside a portion of the rent for it rather than treating the full rent as profit. Boilers, appliances and general wear all need attention over time, and standards are rising: the Decent Homes Standard and Awaab's Law-style hazard timescales are being extended to the private rented sector, so prompt repairs are not just good practice but increasingly an expectation. Budgeting for a maintenance reserve smooths out the years when something larger needs doing.

Tax and overseas landlords

Rental income is taxable, and how you account for it depends on your circumstances. If you usually live outside the UK for six months or more, you are a non-resident landlord, and your agent or tenant must deduct basic-rate tax from the rent unless HMRC has approved you to receive it gross through the NRL1 application. You remain responsible for your UK tax through Self Assessment either way. This is general information rather than tax advice, and a qualified accountant should be consulted on your own position.

Putting the figures together

When you add these elements up, the cost of letting in London is manageable and, for most landlords, modest against the income, particularly once an agent is taking the day-to-day weight off your shoulders. The key is to plan for all of it rather than just the headline rent. If you are weighing up how much support you want and which agent to trust with it, our guide on how to choose a letting agent in London is a good next step.

At JSLA we are always happy to talk a landlord through the realistic costs for a specific property, with no pressure either way. If you would like a clear, honest figure to plan around, do get in touch and we will help you see the full picture.