More revenue per tenancy: compliant ancillary income after the fee ban

The Tenant Fees Act 2019 did exactly what it set out to do: it stripped away a meaningful chunk of the income letting agents had quietly relied on for years. Admin fees, referencing charges passed to tenants, check-out fees, renewal fees — gone. Tenant fees made up roughly a fifth of letting-agent revenue before the ban, and ARLA Propertymark has estimated the sector has lost close to £900 million since the rules came into force in June 2019.

Seven years on, the agents who adapted well aren’t the ones who simply absorbed the loss. They’re the ones who recognised a structural opportunity: the services tenants could no longer be charged for still need to happen. Someone still has to pay. That someone is the landlord — and when you package those services properly, they’re worth more to a landlord than the discounted tenant-side fee ever was to you.

Here’s how to build a compliant, profitable ancillary income line around the three services that sit at the heart of every new tenancy.

Referencing: from cost to product

Before the fee ban, referencing was often priced as a cost-recovery exercise — a modest charge absorbed quietly into an admin fee bundle. Most agents never thought about it as a standalone product with a margin.

Repositioned as a landlord-facing service, it becomes something different entirely. A landlord doesn’t just want a pass/fail from a form. They want assurance: does this applicant earn enough? Are there county court judgments? Is the employer genuine? Is the previous landlord reference believable? Presented that way, thorough referencing is worth paying for — and charging your landlord client for it is entirely lawful, because the Tenant Fees Act only prohibits charging the tenant. Industry guidance puts it plainly: the landlord is buying a service.

On PropertyGoose’s published pricing, a full reference is £14 on pay-as-you-go, with volume pricing reducing the per-reference cost to as low as £10 at scale. A typical two-person household generates two reference checks. At your retail price to the landlord, even at modest margins, that’s a line item that compounds across your portfolio.

The Renters’ Rights Act 2025 has also sharpened the case for rigour here. With assured shorthold tenancies abolished and replaced by periodic tenancies, and eviction under Section 21 gone from 1 May 2026, a poorly referenced tenancy costs far more to exit than before. Landlords increasingly understand this — which makes it easier to sell thorough referencing as risk management rather than paperwork.

Sanctions and AML checks: compliance cost or value-add?

There’s an important distinction here that many agents miss. Since 14 May 2025, all UK letting agents have been brought within the financial sanctions regime as “relevant firms” — meaning every agent must screen clients against the UK sanctions list and report any match or suspicion to the Office of Financial Sanctions Implementation (OFSI), regardless of rent level. This is a separate legal requirement in its own right, not an extension of anti-money laundering supervision. The AML supervision threshold itself is unchanged: agents only need to register for HMRC AML supervision if they handle monthly rents above €10,000.

HMRC, which supervises the property sector for AML purposes, also revised its supervision fee structure from 1 December 2025: the annual premises charge rose from £300 to £400, a £300 application fee was reintroduced for first registrations, and the approvals fee for beneficial owners and officers was kept at £40. That’s a real overhead increase for supervised agencies.

Most agents view this compliance burden as a pure cost. Smart ones have turned the due-diligence work into a chargeable service. A documented sanctions and identity check, properly explained to a landlord, protects them as much as it protects you. Bundled with referencing, it becomes part of a due diligence package — a clean, transparent line on your instruction letter rather than a cost absorbed silently into your management fee.

The key is transparency. Document what you’re doing and why. Landlords who’ve dealt with fraudulent applications quickly come to appreciate this; those who haven’t generally do once you explain the liability exposure.

Tenancy agreements: drafting as a distinct service

Tenancy agreements are often given away for free as part of a tenant-find or fully managed service. This made sense when the admin fee was subsidising the margin — it doesn’t make sense now.

A well-drafted tenancy agreement is legally significant in ways that matter far more post-Renters’ Rights Act. Clauses around rent payment, permitted occupiers, and property condition now carry more weight, particularly as fixed terms give way to periodic tenancies. An agreement generated by a generic online template is not the same product as one drafted by an agent who knows what stands up in practice.

Charging the landlord for tenancy agreement preparation as a discrete service is entirely lawful. The Tenant Fees Act applies to payments extracted from tenants; what you charge the landlord for preparing a legal document that primarily protects the landlord is a matter between you and your client. (Note the one tenant-facing exception: a charge to the tenant for a mid-tenancy variation they request is capped at £50, or reasonable costs if higher.)

If you’re using PropertyGoose’s platform, tenancy agreement generation sits in the same workflow as referencing and sanctions checks — one instruction covers the full pre-tenancy due diligence stack, and you can price it as a bundled service or itemise it on the landlord invoice. Either approach works; transparency is what matters.

Structuring the offer

The practical challenge is instruction-letter design. Agents who’ve successfully rebuilt ancillary income generally do one of two things:

Itemised pricing: List referencing, sanctions/AML, and tenancy agreement preparation as distinct line items with clear prices. Price-conscious landlords can see exactly what they’re paying for, and agents who justify each service are less likely to face pushback than those who bury it in a management-fee uplift.

Tiered service levels: A “standard let” includes core referencing; a “premium let” adds enhanced referencing, documented due diligence, and a solicitor-reviewed tenancy agreement. Tiering lets you capture landlords who simply want the premium option without selling it line-by-line.

Neither approach requires new technology or new staff. It requires repricing what you’re already doing.

The compliance dividend

There’s a secondary benefit that’s easy to miss. Rightmove’s lettings revenue tool values a lettings business at roughly 1.2–1.6× annual revenue — and explicitly states that where you sit within that range depends on how strong and well-evidenced your compliance processes are.

Agencies that can demonstrate robust referencing, consistent sanctions and AML procedures, and properly executed tenancy agreements are not just more profitable per tenancy. They’re worth more as businesses, carry lower regulatory risk, and attract better-quality landlords who value professional standards over the cheapest instruction fee on the high street.

If you want to see where comparing providers shakes out on referencing turnaround, depth of check, and total landlord cost, it’s worth running the numbers before assuming your current supplier is the best-value option.

A practical next step

None of this requires reinventing your business. The Tenant Fees Act closed some doors — it didn’t close the one that leads to the landlord. Referencing, sanctions and AML checks, and agreement drafting are services landlords need, legally require, and increasingly understand the value of. Price them accordingly, document them clearly, and the lost tenant-fee income becomes a distant memory rather than an annual drag on your P&L.

If you’d like to explore how PropertyGoose’s referencing and tenancy workflow fits into an agency setup — including white-label options and API access — the best starting point is a quick conversation with the team.