Hidden Costs: Volume 2 – Renting a property
Life is full of unexpected hidden costs, making essential purchases difficult to budget for including buying a house, weddings and owning your first car. Over the next few months we’ll be releasing articles and graphics to help you budget and take some of life’s curve-balls head on.
Fees can vary across letting agents and will include the drawing up of a contract, running credit checks, gaining references from your employer, bank or previous landlord, guarantor checks, admin costs and immigration checks (if applicable).
In September this year, Citizens Advice announced fees had gone up from an average of £125 in 2009/10 to £200 in 2014/15 – although sometimes they were as much as £700 per person. The average costs for tenants today is around £300.
Before you sign an agreement, make sure you know about all the fees you’ll be charged. Letting agents must clearly set out the fees they charge on their website.
To secure a property, landlords ask for a tenancy deposit. Today, the average deposit is around £800 – around four week’s rent upfront.
By 2026, Cebr predicts that the average tenancy deposit will hit £1,111 across the country and a whopping £2,753 in London.
Along with securing a property, the tenancy deposit gives your landlord protection in case you leave without paying the rent or cause damage. The full amount will be returned to you at the end of your contract if rent payments are met and any damage avoided.
When you move in, you will be provided with an inventory report. The report documents the property, its condition and contents. Anything that is damaged, marked or worn before you move in needs to be recorded in the report. Things to look out for include mould, carpet damage, damp on the windows and condition of doors. Take photos if needed.
Having an inventory can help avoid any potential disputes over your tenancy deposit when you move out, as it proves what state the property was in when you first moved in.
However, to compile an inventory report, there is a charge both at the beginning and at the end of a tenancy. This again varies on the agent you’re using with the average cost around £100.
Whether you’re taking a property furnished or unfurnished, you will need to check what electrical/white goods are included in the price. This includes washing machines and fridges and if they’re not supplied, you will need to factor the cost of purchasing these into your decision.
Also, if you are going with an unfurnished property, the cost of buying furniture including beds, sofas, table and chairs and essentials for each room will add up quickly and can cost anywhere between £1000 – £1500.
As a tenant, you will likely be responsible for paying all the household bills.
- Typical bills may include
- Gas and/or electricity
- Council Tax
- Service charge
- TV license
- Landline phone
- Contents insurance
- Digital TV or satellite TV subscriptions
- Broadband & Internet
Depending on your location and the size of the property, the expenses can vary – the average cost of a 1/2 bed flat will cost around £235 a month per person.
Along with monthly costs, some of the above will include setting up fees – you’ve been warned!
At the end of your fixed term, your landlord can increase the rent if you agree to stay for a further fixed term. Along with this, the letting agents may also charge you a renewal fee to set up a new contract once the tenancy period is over.
The cost can vary from £15 – £300 to draft up a new contract – this is common practice among high street agents. If you end up extending your tenancy every six or twelve months, the costs can add up significantly.
You can potentially avoid this cost by checking your contract to see whether you or your landlord is liable to pay the fee.
Yes, even leaving the property means you may incur a charge of around £75 and if you have not been cleaning regularly, along with general wear and tear, this may mean that your landlord could make reasonable deductions to cover costs for repairs and cleaning.
Your wedding doesn’t have to cost the earth
We look back at a few blockbuster classics and their budgets from years gone by.
What hidden costs are involved when buying a house?
The best staycations, European and long haul destinations for your 2018 holiday