How Much Does It Cost to Rent a Property?

Before you commit to your property search, you need to know what you can afford. It is so easy to under-budget if you simply expect to pay the rental and moving costs, but when it comes to renting a property, there are many unforeseen costs, especially to newcomers in the rental market. The cost of renting will be heavily influenced by location, as those living in the capital can tell you.

Perhaps you have already found your dream home, in the ideal location that is right for your pocket, but we will consider the overall budget of renting a property. Your first go-to is the landlord or letting agent. Ask them about all expected payments before signing the tenancy agreement. We won't be giving you fixed figures, as costs vary between areas, but we can show you what to expect.

Rent in Advance

Depending on the landlord or agent, you may be required to pay two month's rent in advance before you move in. If you are required to pay rent in advance, you will always pay for rent one month ahead for the duration of the agreement. Agents will often run a credit check, and should there be an issue with your references or credit history, you may even be required to pay for rent several months in advance to secure the home.

Holding Deposit

Aside from paying rent in advance, you may also be required to pay a holding deposit to secure the property in a competitive market like London. If you are not set on the property, withhold from paying the deposit just yet. Once you change your mind, you won't get the deposit back – it is called a holding deposit for a reason. A holding deposit is typically equivalent to a week's rent. The landlord or agent will hold on the deposit for 15 days, and if everything is above board, and you haven't changed your mind or provided false information, the deposit can either be refunded to you within 7 days or be put towards your first month's rent or tenancy deposit. You need to make sure that you get the details of the deposit, and how it will be refunded, in writing.

Tenancy Deposit

It may feel like you are just throwing money at deposits, which is precisely why we are focussing on the overall budget. A tenancy deposit acts as a safeguard against rent in arrears or any damages you cause to the property and will be refunded to you at the end of the tenancy after deducting costs, if any. The deposit will be the equivalent of 4 to 6 weeks rent, depending on the discretion of the landlord or agent. If you are renting through an agent, you can be guaranteed that a tenancy deposit will be required, but landlords may be a bit more lenient or flexible on the matter if you rent from them directly. When you do pay a tenancy deposit, the funds need to be placed in an approved tenancy deposit scheme to protect it. You are entitled to all the information regarding the scheme.

Council Tax

If you are taking up a tenancy, you also undertake to pay the obligatory council tax that is levied on the property. This is not for the landlord's pocket, but your own, unless the landlord foots the bill and adds it to your rent.

Extra Costs in Agent Fees

All the little extra fees agents charge can add up. England is offered some protection under the Tenant Fees Act 2019, which prevents agents from charging admin and referencing fees, but this is only applicable to England. Elsewhere in the UK, agents can still charge fees for basic services, and besides, all agents may charge fees for;

• Sending utility bills
• Replacing a key
• Late payment of 14 days or more on the rent
• TV licenses
• Penalties in changing or ending the tenancy early on your request

A Word of Caution

The housing market is rife with scammers and fraudsters who are on the lookout for an easy meal, so to speak. Do not pay anything until you have actually seen the property and have the verified details of the landlord or letting agent.