Can letting agents charge clients for ID verification, and how common is the passthrough?

Per Estate Agent Today's July 2025 industry survey, 84% of UK estate agents are either already charging clients for ID verification or planning to introduce a passthrough within 12 months. The typical passthrough is £20 per ID check against an underlying vendor cost of £2-5 per check (iamproperty/movebutler at £2.22, SmartSearch at £5+VAT, Veriphy at £4+VAT) — agency margin per ID check sits around £15-£18. With a typical 5-let-per-week branch running 250+ checks per year, the passthrough generates ~£3,750-£4,500 of annual operational margin per branch.

The passthrough is contractually permitted under the Tenant Fees Act 2019 because ID verification is treated as a permitted payment — specifically a 'default fee' or a 'damages and other costs payment' tied to a verifiable third-party invoice. Agents must publish the fee on their tariff and disclose it on the tenancy agreement; non-disclosed passthroughs are illegal and have triggered enforcement action by Trading Standards in the past two years.

For regulated firms in scope of MLR-2017 (letting agents from May 2025 onwards under the consolidated rule), the passthrough does not change the firm's compliance obligation — the firm remains responsible for the screening regardless of who funds the cost. The Stratum letting-agent suite endpoint at /v1/suites/letting-agent/check bundles ID verification (when shipped — currently deferred per W30 routing pending paying-customer signal) with sanctions + PEP + adverse media + UBO walk + property risk into one £4.95 check, leaving the agent typical £15+ margin on a £20 client passthrough.

Source: Estate Agent Today — AML compliance costs (Jul 2025)

Last updated 2026-05-09.