Key Takeaways:
- Guaranteed rent costs landlords nothing in fees or commission — the “cost” is receiving 80-90% of market rent in exchange for guaranteed income and full property management.
- A London landlord with a 2-bed flat earning £1,700/month market rent could net £3,758 more per year through guaranteed rent than with a traditional letting agent, once voids, fees, and arrears are factored in.
- Over five years, guaranteed rent can deliver £23,578 more in net income than traditional letting — rising above £32,000 once you factor in your time as a landlord.
- Rent guarantee insurance (£150-£400/year) only covers lost rent, with claim delays and exclusions — guaranteed rent covers rent, management, maintenance, compliance, and evictions in one package.
- AMS Housing Group charges zero commission, zero setup fees, and zero hidden costs — landlords receive a fixed monthly payment for up to 5 years, even during void periods.
Last year, a landlord in Lewisham called us after calculating what his “cheaper” letting agent had actually cost him over three years. Between two void periods (seven weeks total), a tenant who stopped paying for four months, one eviction, and the agent’s 12% management fee, he’d lost just over £14,000 in rent and fees compared to what our guaranteed rent quote would have paid him. His monthly statement from the agent always looked fine. The annual reality was brutal.
That’s the problem with asking “how much does guaranteed rent cost?” in isolation. The monthly figure tells you almost nothing. What matters is the annual and five-year net — and once you run those numbers against what traditional letting actually costs in London right now, the gap is hard to ignore. This article gives you the actual figures: what you receive, what you save, what the alternatives really cost, and a full five-year projection you can take to your accountant.
Want a quick answer for your property? Request a free guaranteed rent valuation and we’ll send you a specific figure within 48 hours. Or keep reading for the full breakdown.
The Short Answer: Guaranteed Rent Costs You Nothing in Fees
Guaranteed rent schemes charge landlords no upfront fees, no commission, and no setup costs. Zero.
So where does the provider make money?
The “cost” is the gap between your property’s open market rent and the guaranteed rate you receive. Most providers offer somewhere between 80-90% of current market value. That 10-20% margin is how the company covers its risk — paying you every month regardless of whether the property is occupied, whether the tenant is paying, or whether the boiler just failed.
Think of that margin as a risk premium, not a fee. You’re paying for certainty. And unlike a letting agent’s percentage, you don’t pay it on top of your rent — it’s built into the rate. There’s no invoice, no VAT, no surprise line item. The amount you agree is the amount that hits your account, every month, for the length of your contract.
With AMS Housing Group’s guaranteed rent scheme, that rate also includes full property management, maintenance, tenant sourcing, compliance certificates, and eviction handling. No extras. No add-ons. No small print.
What Guaranteed Rent Pays Across London
Percentages are abstract. Here’s what the numbers actually look like for different property types in 2026.
| Property Type & Location | Market Rent (pcm) | Guaranteed Rent Range (pcm) | Monthly Difference |
|---|---|---|---|
| Studio flat, Ilford | £1,050 | £890 – £945 | £105 – £160 |
| 2-bed flat, Lewisham | £1,700 | £1,445 – £1,530 | £170 – £255 |
| 3-bed semi, Croydon | £2,100 | £1,785 – £1,890 | £210 – £315 |
| 5-bed HMO, Tottenham | £3,400 | £2,890 – £3,060 | £340 – £510 |
These are illustrative ranges based on current London market conditions, not formal quotes. Your rate depends on property condition, location, agreement length, and local demand. For an accurate figure, request a free valuation.
That monthly difference is real. But it’s also misleading when viewed in isolation — because it doesn’t account for the costs you’re no longer paying. To understand why the rate sits where it does, read our guide on how guaranteed rent is calculated. And if you’re still unsure whether the trade-off makes financial sense, our honest analysis of whether guaranteed rent is worth it runs the full comparison.
The Hidden Costs of Traditional Letting
Most landlords massively underestimate what traditional letting actually costs once you stack up every fee, every void, and every risk. Here’s the full picture.
Void Periods Drain Your Income
The average London void between tenancies runs 21-28 days, according to NRLA data. On a property with £1,700/month market rent, that’s roughly £1,400-£1,600 lost per void — plus you’re still paying the mortgage, buildings insurance, and council tax during that time.
Most landlords experience at least one void per year. Some face two. With guaranteed rent, your income doesn’t pause for a single day.
Letting Agent Fees Stack Up Fast
Traditional letting agents charge more than most landlords realise once you add every line item together:
| Fee Type | Typical Cost |
|---|---|
| Full management fee | 10-15% of monthly rent (plus 20% VAT on the fee) |
| Tenant-finding fee | £500-£1,200 per tenancy |
| Tenancy renewal fee | £100-£250 each time |
| Checkout/inventory fee | £120-£250 per tenancy |
| Maintenance markup | 10-20% added to contractor invoices |
On a £1,700/month property with a full-management agent charging 12%, you’re paying £204/month in management fees alone — £2,448 per year. Add a tenant find (£800), a renewal (£175), and a checkout (£150), and you’re looking at over £3,500 in agent fees before anything goes wrong.
Rent Arrears Are More Expensive Than You Think
When a tenant stops paying, the real cost goes far beyond the missed rent. Under Section 8, a landlord must wait until a tenant owes at least three months’ rent before they can even apply to court. The average court process for possession currently takes 33.8 weeks from application to enforcement, according to Ministry of Justice data. During that time, you’re receiving nothing.
Recovery rates on rent arrears sit at roughly 23%. For every £1,000 owed, you’ll recover about £230 — if you’re lucky.
Under guaranteed rent, arrears are the provider’s problem. Your payment continues regardless.
Compliance and Maintenance Eat Into Your Returns
Gas safety certificates, EICRs, EPC renewals, emergency boiler repairs, between-tenancy redecorations — these costs add up to £800-£2,000 per year depending on the property. Self-managing landlords also spend 5-10 hours per month on property admin. At even a modest £25/hour for your time, that’s another £1,500-£3,000 annually. For a full breakdown of what landlords typically spend, see our guide to landlord costs.
Guaranteed Rent vs Traditional Letting: Annual Cost Comparison
Numbers talk. Let’s take a 2-bed flat in East London with a market rent of £1,700/month and compare both routes over a full year.
Scenario A: Traditional Letting Agent (Full Management)
| Item | Annual Cost/Income |
|---|---|
| Gross rental income (12 months) | £20,400 |
| Management fee (12% + VAT) | -£2,938 |
| Tenant-finding fee (one new tenant) | -£800 |
| Void period (1 month between tenancies) | -£1,700 |
| Maintenance and repairs | -£950 |
| Gas safety certificate | -£85 |
| Electrical safety check (EICR) | -£195 |
| Checkout/inventory | -£150 |
| Net annual income | £13,582 |
Scenario B: Guaranteed Rent (at 85% of Market Rate)
| Item | Annual Cost/Income |
|---|---|
| Guaranteed rent (£1,445 x 12 months) | £17,340 |
| Management fee | £0 |
| Tenant-finding fee | £0 |
| Void periods | £0 (covered) |
| Maintenance and repairs | £0 (covered) |
| Safety certificates | £0 (covered) |
| Net annual income | £17,340 |
Result: the guaranteed rent landlord nets £3,758 more per year — despite receiving £255 less per month in rent.
And this assumes a relatively smooth year for the traditional route — one month’s void, no arrears, no eviction, no major repairs. Throw in a non-paying tenant or a boiler replacement, and the gap widens by thousands. For the full side-by-side breakdown of every operational difference, see our guaranteed rent vs traditional letting comparison.
Five-Year Financial Projection: Where the Gap Gets Serious
A single year’s numbers are useful, but the real picture emerges over a longer period. Here’s a five-year projection for the same 2-bed East London flat.
Assumptions:
– Market rent: £1,700/month (Year 1), rising 3% annually
– Guaranteed rent: 85% of market, reviewed annually
– Traditional letting: 12% management fee + VAT, one void month per year, one tenant change every 18 months
– Maintenance: £950/year (rising 4% annually for traditional; covered for guaranteed rent)
– One minor arrears incident in Year 3 (two months’ lost rent, partial recovery)
| Year | Traditional Letting: Net Income | Guaranteed Rent: Net Income |
|---|---|---|
| Year 1 | £13,582 | £17,340 |
| Year 2 | £13,989 | £17,860 |
| Year 3 | £10,794* | £18,396 |
| Year 4 | £14,836 | £18,948 |
| Year 5 | £15,281 | £19,516 |
| 5-Year Total | £68,482 | £92,060 |
Year 3 includes a two-month arrears incident (£3,502 lost rent, £230 partial recovery via court).
Over five years, the guaranteed rent landlord earns £23,578 more in net income. Factor in landlord time at £25/hour (roughly 6 hours/month for self-managed elements even with an agent), and the total cost of ownership gap widens to over £32,500.
This isn’t hypothetical. These are realistic London figures based on current rents, current agent fees, and current court timelines. The traditional route only comes out ahead in a scenario where you experience zero voids, zero arrears, zero major repairs, and zero compliance surprises over five consecutive years. In London’s rental market, that’s a fantasy.
Guaranteed Rent vs Rent Guarantee Insurance
Google searches often conflate these two products, but they’re fundamentally different — and the cost comparison reflects that.
Rent guarantee insurance (RGI) is a standalone policy that covers lost rent if your tenant stops paying. It typically costs £150-£400 per year, depending on the level of cover. But it comes with significant limitations:
- Excess periods: Most policies won’t pay out until the tenant is 1-2 months in arrears
- Claim caps: Cover is usually capped at 6-12 months of rent
- Exclusions: Pre-existing arrears, tenants who fail referencing retroactively, disputes over deposit deductions — all commonly excluded
- No void cover: RGI does not pay you during empty periods between tenancies
- No management: You still need a letting agent or must self-manage
- Claim delays: Processing can take weeks, sometimes months
| Feature | Rent Guarantee Insurance | Guaranteed Rent (AMS) |
|---|---|---|
| Annual cost | £150-£400 | £0 (built into rate) |
| Void period cover | No | Yes |
| Arrears cover | Partial (with excess and caps) | Full — you’re paid regardless |
| Property management | No | Included |
| Maintenance and repairs | No | Included |
| Tenant sourcing | No | Included |
| Compliance certificates | No | Included |
| Eviction costs | No | Fully covered |
For a more detailed comparison of both products, read our rent guarantee insurance UK guide.
RGI makes sense for landlords who want to self-manage and simply need arrears protection. But if you’re comparing the total cost of ownership — insurance plus agent fees plus maintenance plus void risk — guaranteed rent covers all of it in a single, predictable payment. For a broader look at how the model works end-to-end, see our guide on how guaranteed rent works. And if you’ve heard negative things about guaranteed rent, our breakdown of myths about rent guarantees separates fact from fiction.
Provider Fee Red Flags: What to Watch Before You Sign
Not every guaranteed rent provider operates the same way. Some offer a headline rate that looks attractive, then claw back margin through charges buried in the contract. Here’s what to scrutinise.
Double-dipping on management fees. A few providers quote a guaranteed rent rate and then deduct a separate management fee on top. You’re already accepting a lower rent — a management fee on top of that is effectively charging you twice. Reputable providers build everything into one transparent rate.
Maintenance cost caps. Some schemes advertise “free maintenance” but limit cover to the first £150-£200 per job. When the boiler goes or the roof leaks, you’re still paying. Ask for the cap in writing before you sign.
Early termination penalties. Steep exit fees — sometimes three to six months’ rent — lock you in even if the service deteriorates. Check whether you can leave after a reasonable minimum term without penalty.
Deferred start dates. Watch for providers who agree a rate but delay payments until they’ve placed a tenant. That defeats the purpose. Your payments should start from the agreed date, regardless of occupancy.
No Companies House presence. Any legitimate guaranteed rent company should be registered at Companies House and have verifiable accounts. If you can’t find them there, walk away. Our guide on how to choose a guaranteed rent provider covers the full checklist.
With AMS Housing Group, the rate you agree is the rate you receive. Zero commission, zero management fees, zero hidden charges. We’ve operated this way since 2009, managing over 500 properties across London and the South East.
How the Renters’ Rights Act Changes the Cost Equation
If you’re comparing guaranteed rent costs in 2026, there’s a regulatory shift you can’t afford to ignore. The Renters’ Rights Act abolishes Section 21 “no-fault” evictions from 1 May 2026, and the financial implications for landlords are substantial.
Every eviction must now go through Section 8 grounds — proving a legally valid reason in court. Notice periods stretch to four months for some grounds. Court backlogs mean the average possession case takes 33.8 weeks from application to enforcement. During that time, a self-managing landlord or one using a traditional agent receives nothing while covering mortgage payments, insurance, and potentially legal fees of £3,000-£10,000+.
The Act also introduces mandatory PRS Ombudsman membership (with compensation orders up to £25,000), the Decent Homes Standard applied to private rentals, and Awaab’s Law requiring landlords to address hazards within strict timeframes. Non-compliance penalties run up to £7,000.
Under guaranteed rent, the provider handles — and pays for — the entire eviction process. Your monthly payment continues unchanged throughout. For a detailed breakdown of how the Act affects guaranteed rent agreements, read our guide on guaranteed rent and the Renters’ Rights Act 2026.
The cost of landlording is rising. Guaranteed rent doesn’t just protect your income — it caps your exposure to compliance costs that grow heavier every year. For landlords exploring alternatives, renting your property to the council offers a similar stability model for certain property types.
Frequently Asked Questions
How much does guaranteed rent pay compared to market rent?
Most providers offer 80-90% of the current market rent. On a London property with a market rent of £1,700/month, that translates to roughly £1,360-£1,530/month. The exact rate depends on location, property condition, number of bedrooms, and agreement length. Request a free valuation for a specific figure.
Are there hidden fees with guaranteed rent?
With AMS Housing Group, no. There are no setup fees, no commission, no management charges, and no maintenance markups. Some other providers do charge separately for management or cap maintenance cover — always read the contract and ask direct questions. See our section above on provider fee red flags.
What happens if a guaranteed rent company goes bust?
This is a legitimate concern. Check that any provider is registered at Companies House with filed accounts. Look for a track record of at least five years, a substantial property portfolio, and council partnerships (which indicate financial stability). AMS Housing Group has been operating since 2009 with over 500 properties under management.
Does guaranteed rent affect my mortgage?
Most buy-to-let mortgages permit guaranteed rent arrangements, but you should notify your lender. Some lenders treat guaranteed rent as a company let, which may require consent. The guaranteed rent income itself is typically acceptable for mortgage affordability calculations — and the guaranteed nature of the income can actually strengthen your position with lenders.
Who pays for maintenance with guaranteed rent?
The provider does. With AMS Housing Group, routine maintenance, minor repairs, between-tenancy preparation, and compliance certificates (gas safety, EICR, EPC) are all covered within the guaranteed rate. Major structural issues remain the landlord’s responsibility, as they would under any arrangement. For full details on landlord responsibilities, see our dedicated guide.
Is guaranteed rent better than using a letting agent?
Financially, guaranteed rent typically produces higher net annual income once you account for agent fees, void periods, arrears risk, and maintenance costs. The comparison table above shows a £3,758 annual advantage for a 2-bed East London flat. The trade-off is a lower monthly headline rent — but the total package includes full property management, not just rent collection.
How long are guaranteed rent contracts?
AMS Housing Group offers agreements from 1 to 5 years. Longer contracts often command a slightly higher guaranteed rate because they reduce the provider’s risk. Most landlords opt for 3-year agreements as a balance between commitment and rate optimisation.
Is guaranteed rent taxable?
Yes. Guaranteed rent is treated as rental income for tax purposes and must be declared on your self-assessment return. Because the provider handles management, maintenance, and compliance, you’ll have fewer allowable expenses to offset — but your net income is typically higher, making the overall tax position straightforward. Consult your accountant for advice specific to your circumstances.
Get Your Free Guaranteed Rent Valuation
The only way to know exactly what guaranteed rent would earn for your property is to get a tailored quote. Every property is different, and the figures in this article are illustrative. Your actual rate depends on location, condition, size, and current market demand.
AMS Housing Group has been providing guaranteed rent across London and the South East since 2009, managing over 500 properties for landlords who want reliable income without the operational headaches. We offer:
- Zero commission — no management fees, no setup costs, no hidden charges
- Agreements from 1 to 5 years — with flexible terms
- Rent paid on the same date every month — even during void periods
- Full property management included — inspections every 4-6 weeks, maintenance, compliance, everything
- Complete eviction protection — we handle and fund the entire process
Request your free, no-obligation valuation to find out exactly what your property could earn. Or call our property team directly on 020 3793 2247 to discuss your situation.
No pressure. No obligation. Just a clear picture of what guaranteed rent means for your bottom line. You can also contact us to ask any questions before committing.
