What you need to pay before you move into your rental home
Moving home is one of the most stressful life experiences people go through. In fact, it ranks as number three, just behind the death of a loved one or a divorce. That might seem a bit much considering moving home is typically a positive move. However, it can be costly, and if you don't know where all those costs are coming from, it can be incredibly stressful.
Before Moving In
The good news is that things have changed drastically for tenants since new laws came into effect in 2019. The Tenant Fees Act (2019) has severely limited the charges that tenants can be made to pay. Before you move in, you will need to pay a holding fee, as well as a tenancy deposit.
Holding Fee
This refundable fee is paid to the letting agent or landlord to secure the property. You should only pay this once you have:
Agreed to general terms such as the cost of rent, the tenants who will move in, the terms of the tenancy agreement, the length of the initial rental term (often a minimum of one year), the frequency of rent payments (weekly or monthly), and the move-in date.
If anything changes in this agreement after your deposit has been paid you can halt the process and receive your holding fee back in full.
Once the holding fee is paid, the agent or landlord will pursue tenant references. They cannot accept another holding deposit during this period.
The maximum deposit for a holding fee is one week of rent. The fee can be held for 15 days and then must be returned in full. However, if you pull out of the agreement without true cause the landlord can keep it as a forfeit.
Tenancy Deposit
This may also be referred to as a security deposit. It's the sum you pay at the beginning of your tenancy. When you move out, it is refunded to you. However, it may be subject to deductions if there is damage to the property (excluding normal wear and tear), unpaid rent arrears, or fees such as replacing lost keys. Any permitted fees should be included in your initial tenancy agreement.
Once your deposit has been paid, it will be registered (by the agent or landlord) with a protection scheme. You will be notified of which government-approved scheme they have used, how much the deposit was, and how you may contest deductions come the end of your tenancy. You should receive this information within 30 days after the deposit is paid.
As per for Tenant Fees Act (2019), this fee can be no more than five weeks of rent.
If, like many, you would struggle to provide five weeks rent to, we can help! Check out our Deposit Promise where you’ll only pay a small percentage of your deposit instead.
Rent
Before you move in, you will need to pay a month of rent. The day your rent is due will be the date you moved in. Therefore, if you moved in on the 23rd of the month, the next month's rent will be due by the 23rd.
After Moving In
After your tenant references have been accepted and you have paid the tenancy deposit, it's time to move in! After moving home, there are still budgetary steps to take.
Payments required include:
Council tax
Water bills
Gas and electricity
Property service charges, if relevant
You can speak to the landlord/agent for estimates about these bills when you view the property. The costs don't end there, don't forget to factor in the following:
TV license
Digital television subscriptions (optional)
Internet bill
Contents insurance (optional)
Phone bill if you have a landline connected (optional)
Use a budget planner to ensure you can afford all of the costs, money saving expert has a great one. You will also need to consider your normal monthly spending, such as your mobile phone bill, food, clothing, nights out, insurance, credit card or loan repayments, childcare, etc. You don't want to go into debt by over-extending yourself so always over-estimate to be safe.
If you need any further advice, get in touch with our team today.