Letting Agents and the Myth of the ‘Market Rate’

Table of Contents

• Introduction
• Follow the Money
• Manufactured Pressure
• The Tenant Has No Power
• This Isn’t Just Economics. It’s Exploitation.

Introduction

The phrase “market rate” is thrown around like a get-out-of-jail-free card every time tenants question a rent increase. It’s the default excuse used by letting agents and landlords alike. But when we stop to ask who actually sets the market rate, the answer becomes uncomfortably clear: letting agents play a far bigger role than they care to admit.

It’s bad enough that housing, something as essential as food, water, and heat – is treated like a branded tub of butter in a supermarket aisle, its price fluctuating with trends and profit margins. But the game is rigged, and tenants are paying the price.

Follow the Money

Letting agents lost a major revenue stream when the Tenant Fees Act came into force in 2019. No more charging tenants extortionate fees for referencing, tenancy agreements, or “admin”. With tenant fees banned, agents had to make up the difference somehow.

They turned to where the money now comes from: monthly management commission. Most letting agents are paid a percentage of the rent by the landlord – every month, for every property. The higher the rent, the more money they make.

Manufactured Pressure

So, what do agents do? They whisper in landlords’ ears:

• “You could get more for this property, you know.”
• “Look at what your neighbour is charging.”
• “There’s a queue of people ready to move in if this one can’t pay.”

This tactic is repeated, property after property, street after street. It only takes a few pushes for rent levels across an area to climb beyond reach. And because agents tend to work in tightly defined local patches, they have the power to influence entire micro-markets. That influence is not neutral – it’s profit-driven.

The Tenant Has No Power

When a rent increase is served, a tenant can try to challenge it at a First-tier Tribunal. But if every other similar property in the area has already been inflated, that challenge will likely fail. Why? Because the “market rate” has already been artificially hiked.

Worse still, a tenant who dares to question it may be served with a Section 21 eviction notice, the so-called “no fault” eviction. The message is clear: pay up or move out.

This Isn’t Just Economics. It’s Exploitation.

We’re sick of seeing desperate tenants priced out of homes because agents and landlords are hiding behind a so-called market rate – one they helped create. This isn’t about supply and demand. It’s about greed. It’s about power. And it’s about using a housing crisis as a money-making opportunity.

Letting agents are not passive bystanders in the housing market. They are active players, influencing rent prices for their own financial gain. It’s time we started calling that out.

At Tenant Angels, we hear from renters every day who are frightened, frustrated, and fed up.

Housing is a right, not a revenue stream. And it’s time we started treating it that way.