Being a tenant can be great, and it offers a quicker way for you to have a home without having the worry and hassle of buying a house. It is pretty simple to become a tenant, but are there any upfront costs?
Well, we are going to take a look into what is required from you as a tenant, before you can move in to your new rented accommodation.
Up until the 2016 autumn statement, tenants were obliged to pay letting agent fees. This included payment for the privilege of putting down a deposit, and payment for drawing up tenancy agreements between the tenant, landlord and lettings agent – as well as paying for the agent to carry out credit, reference and immigration checks. These were classed as administration fees, which were costing the tenant more money than necessary. After all, the tenant has to find deposit money to put down on a property, which can be a large lump sum.
These letting agent fees have now been banned by the government; moving this obligation to the landlords themselves, and allowing the tenant to keep more of their money. The tasks that these fees covered were towards finding out if the tenant is suitable for the property that is to let; including whether they will be able to keep up with paying their rent on time, what their background credit history is like, employment status, getting references for the tenants, sorting out guarantors, as well as immigration checks too.
Now these fees have been banned and the job to find this information is down to the landlord, it doesn’t necessarily mean that tenants won’t have to fork out some money for these admin tasks. The landlord may still charge a fee for doing these administrative tasks, or may include this charge within your rent
You will need to be able to put down a deposit to the landlord. The price of this varies considerably throughout the UK, and there are many ways a landlord will come to the sum they are asking for.
Some landlords like a months rent in advance, others prefer anywhere up to six months rent in advance. However, the average rate is two to three months rent in advance. Initially, the deposit secures the property for the tenant and means that it will be taken off the market. The other reason for providing a deposit is, if a tenant damages the property in any way, then the landlord has the money to cover any damages. Should the tenant keep the property in a satisfactory condition, then they are entitled to get their deposit back when they finish renting the property.
The recent letting agents fees ban has been a sigh of relief for tenants who were paying out a lot of money before they have even moved in; money that was, at times, unnecessarily expensive. Although tenants should still make sure their credit history is in check before renting, and that all the other required checks will come back in their favour, now the main financial focus for tenants to worry about is gathering the deposit required for their future homes – with, hopefully, less other fees and charges to worry about.