How to start an estate agency

AML registration first, because it is the only one with a criminal offence attached to getting the timing wrong. HMRC requires you to register before carrying on any activity as an estate agency business and states that trading unregistered is a criminal offence. Redress scheme membership next — required from the moment you engage in relevant estate agency work or lettings agency work, not from your first completion. Then, if you will hold client money: a CMP scheme for lettings, or a client account with the right title for sales, before any money arrives. Company formation, VAT registration if you expect to exceed £90,000, PAYE if you will employ anyone, and insurance run alongside these.

The AML side is the predictable part: a one-off £300 application fee, £400 per premises registration, and £40 per beneficial owner, officer or manager tested through the approval process. Then £400 per premises annually on the declaration. If turnover is below £5,000 you pay in full and get a £500 refund once accepted. Redress scheme membership and CMP scheme membership are priced by the schemes and vary. Professional indemnity is a scheme condition for CMP members and is priced on your client money and income. Budget for the annual renewals from day one: the £400 per premises comes round every year.

It is a choice to make at the start. If the tenant pays rent direct to the landlord, deposits go direct to the landlord and maintenance invoices are issued direct to the client, you hold no client money — MHCLG's guidance accepts exactly that evidence — and the CMP scheme requirement falls away with the client account condition, the reconciliation burden and a chunk of professional indemnity exposure. What you give up is control of the flow, which matters for chasing arrears and for paying contractors quickly. Many new agencies start without client money and add it once volume justifies the infrastructure, which is a reasonable sequence.

It depends on profit level and on what you intend to do with the business, and 2026 changed the arithmetic. Dividend rates rose on 6 April 2026 to 10.75% ordinary and 35.75% upper, which narrows the company advantage at moderate profits. Corporation tax is 19% to £50,000 and 25% above £250,000 with marginal relief between — and the limits are divided by the number of associated companies plus one, so a structure with several companies gets a much lower small profits limit. The other consideration is exit: a company selling a lettings book is taxed on income with no BADR, where a sole trader selling the same book is within capital gains and can claim BADR at 18%. That is a decision made at the start whose consequence lands years later.

If you trade unincorporated, yes. The thresholds are below. Qualifying income is total income from self-employment and property before expenses — turnover, not profit — taken from the previous year's return. Over £50,000 tested on 2024/25 was mandated from 6 April 2026, with the first quarterly update due 7 August 2026. Over £30,000 tested on 2025/26 follows from 6 April 2027, and over £20,000 tested on 2026/27 from 6 April 2028 — the £20,000 phase is legislated in reg 27 of SI 2026/336. Dividends from your own company do not count towards qualifying income; gross self-employment turnover and gross property income do. Partnerships are deferred with no date announced.

Trading before the AML registration is granted, which is a criminal offence. Taking a reservation fee or a holding deposit into the business account because the client account is not open yet. Advertising without the material information the NTSELAT guidance requires — council tax band, price and tenure at minimum, plus property type, construction, room measurements, utilities and parking. And writing terms of business that do not comply with EAA s.18, which requires particulars of when the client becomes liable to pay and how the fee is calculated, in the form prescribed by the 1991 Regulations. Get that wrong and the contract is unenforceable except by order of the court.