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Renting – Moving out

15th November 2023

By Ben Walker

Renting

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When you’re thinking about moving out and renting, there are a few different considerations for you to take into account. While renting may be more flexible than buying your own property, it is still a big commitment. So you need to make sure you take the time to find the right place for you. There’s also a big checklist for you to go through to make sure you’ve got everything ready and sorted. 

It all starts with the initial search. Figuring out where you want to live isn’t easy. The best practice is to make sure you will actually have a source of income wherever you want to move. So, make sure you sort out a job or alternative beforehand. Many landlords will also ask for a security deposit and one months rent before you move in. This is to make sure that you can actually afford the rent.

Other things to consider before you move ahead with renting are how long you actually want to live there for. Most properties have a minimum time period of 6 months, but you can also get tenancy agreements for up to 3 years. The type of tenancy you have also affects the duration. For example, a fixed-term tenancy is when you agree to rent the property for a set time. You can also get a periodic tenancy where your tenancy is a rolling contract which is renewed each month. Once your fixed-term tenancy expires, often you would switch to a periodic tenancy if you keep renting the property. If you’re not sure, don’t be afraid to ask to get all the information you need to make a decision.

Letting agencies

Letting agencies are often the first place people look when they are looking for a place to rent. They can be very useful, often offering many rental properties, arranging viewings, and helping to negotiate the tenancy agreement. Additionally, they may be managing the properties on behalf of the landlord. If a letting agency is involved, then they must be a member of a government backed scheme, and must clearly state which one they are members of. 

However, letting agencies also require more fees to be paid. These can be in the form of setting up inventories and credit checks among others.

Types of tenancy agreement

Assured-shorthold tenancy (AST)

This is the most common type of tenancy. They usually last between 6 to 12 months. A tenancy can qualify as an AST so long as the property is privately owned, the rent is less than £100,000 a year and the landlord doesn’t live there. By law, your deposit must be protected, and landlords must supply 2 months notice if they want you to leave.

Excluded tenancy

If you live with or share rooms with your landlord, then you might receive an excluded tenancy agreement. If you have paid a deposit then your landlord is not required to protect it, and generally your landlord does not have to serve you notice,

Assured tenancy

This type of tenancy is usually offered by housing associations, and so is much rarer. They typically offer much more security, as the terms of the agreement state that you can live in the property for the full length of the initially agreed time period. When the term ends, the landlord doesn’t have the right to repossess the property, and can only serve notice if you break the tenancy terms, such as failing to pay rent.

Regulated tenancy

This is a long term contract with a private landlord. The rent is set by the Valuation Office Agency, and the tenants are entitled to fair rent for the full term of the tenancy.

What will it cost you

Rent

There are a few different costs involved in renting, many of which are overlooked. The most obvious of these is the rent payments. This is usually advertised as per week (pw) or per calendar month (pcm). When moving in, you will normally have to pay your first month’s rent in advance. When trying to calculate your rent, make sure you remember that most months have more than 28 days! If you are paying per week and you base your budget of 4 weeks, you could end up running out of money.

Another thing to make note of is whether you are paying for your bills included in your rent. This can sometimes work out cheaper so don’t be afraid to get quotes from energy suppliers to work out your best option. Paying your bills included with your rent can be especially useful for those who are sharing a house.

Security deposits

This is a payment made to the landlord when you move into the property. The security deposit is used to cover the costs of any unpaid rent, or the cost of potential damage to the property. 

Generally, security deposits are between 4 to 6 weeks of rent, and so can be quite a lot of money. This will have to be paid at the same time as your first month of rent in advance. 

Additionally, you can’t bank on getting this money back at the end of your rental agreement. If the property does end up being damaged then the landlord will keep part of the security deposit, or all of it. But, if you have an assured-shorthold tenancy, then your landlord will have to make sure the deposit is paid into an accredited tenancy deposit scheme, and give you details of the scheme.

Holding deposits

Often, letting agencies could ask you to pay holding deposits. This is much more common if you are looking to rent in bigger cities such as London.

A holding deposit is when you are asked to pay to confirm that you intend to rent a property. When you pay a holding deposit, the letting agency will stop showing the property to potential tenants, which would give you time to gather references and sign the tenancy agreement.

Once you’ve paid the holding deposit, you are now committed to renting the property, and the landlord is committed to renting the property to you. They generally can cost between £100 to £500, but it is dependent on the value of the rent. Holding deposits currently do not have to be protected, so you may struggle to get your holding deposit back if you back out of renting the property.

Fees

If you decide to find a property through a letting agent, there are a few fees that may be involved. This can include the cost of setting up the tenancy agreement, checking references and credit reports, conducting an inventory, and making sure the deposit is protected. These costs could set you back £300 or more. If you also have to pay check-in and check-out fees, this could bring the total cost closer to £600.

Furnished or unfurnished

A furnished property should come with everything you need to move in immediately and live comfortably. This should include your main white goods, such as a fridge and washing machine, but should also include your bed, sofas, dining tables and more. Unfurnished properties come in varying states of furnishing, as it depends on the landlord or agent. Basic features, such as cookers and fridges, should be standard, but the rest will be supplied by the tenant.

Advantages of renting furnished

Less upfront cost – As most of the furniture you’ll need will already be at the property, you won’t need to spend loads of money buying items such as beds and tables. However, it’s worth bearing in mind that the cost of the rent could be more to cover the additional included items

Convenient – Instead of spending hours or even days transporting big items to the property, it’s already set up. This will allow you to have a much speedier moving-in day.

No repair costs – If your agreement states that the landlord supplies the furnishing, that means they’ll probably cover the costs of repairs and replacements. For example, if the cooker breaks due to wear and tear, the landlord would have to replace it.

Advantages of renting unfurnished

Ends up cheaper – If you decide to rent an unfurnished property, the rent and deposit could be lower because it is less hassle for the landlord. Also, the furniture that you buy can then be taken to your next property, so is an investment for the future.

More likely to keep your deposit – The more furniture the landlord supplies, the more likely you are to damage something! If you do end up damaging something the landlord owns, that’s going to come out of your security deposit, so you will have paid for it anyway.

You can make it your own – In furnished properties, often the landlord will not allow you to make changes. If you are furnishing it yourself you would be able to personalise the property.


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Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

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Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

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Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


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