First-time Renter: What Do I Need to Budget For?

Renting a property can prove to be a challenge, from student days and beyond. For first-time renters, it really pays to know the “ins and outs” of renting a property and to be aware of most landlords’ requirements. In addition to our budget calculator that will definitely help you to plan your budget, here ere are a few pointers.

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Rent

Most first-time renters set out with a nice, conservative number in mind for a maximum rent price. Then, as they look around the various properties, they will see things they fall in love with, such as gleaming wooden floors, rustic overhead beams, stone fireplaces, etc. — the list goes on. This is where a canny estate agent might tell them that the property is just £10 more than their budget. It’s easy to forget what you had said was your maximum budget, and that this seemingly small extra actually adds up to around £520 a year. Be very careful that you don’t allow a potential landlord to get you to commit to more than you can afford.

Council Tax

This can vary greatly depending on your location, even for properties with roughly the same value. Properties are divided into bands. Band A to G properties have the lowest taxes and band H and above have the highest. It is safest for a first-time renter to choose a property in bands A to D, depending on their budget. The good news is there’s a 25% discount on Council Tax for those living alone.

shutterstock_302066255Electricity, Water and Gas

Electricity and gas costs are based on location and usage. Flatsharing can help reduce these bills. An average household of 4 adults can expect to pay about £1,200 per annum on both bills together. Unmetered water bills tend to be higher than metered ones.

Telephone, Internet and Television

The best way to find out telephone and internet rates is to check by postcode. This can help with finding a less expensive locality. TV bills can also be pre-estimated down to the last penny. Remember that watching live TV on a computer or on a Smart TV requires a license too.

Household Insurance

The value of all your possessions can add up to an impressive amount. So, it is a good idea to budget in insurance for furniture and electronic appliances, as any of these can be lost through natural causes or burglary. It’s difficult to estimate the cost of premiums because their rates go up in the case of shared renting. While estimating an amount for a budget, it is better to place the estimate at the higher end than at the lower.

Tenancy Fee

This fee covers a broad range of costs, such as checking your credit health, employment status, your references from previous employers and current or past landlords. Any other documents or checks to ensure that you can afford the tenancy are included as well. The landlord will also use this fee to create the Tenancy Agreement and may even take part of it as a security deposit. The good news is that most landlords also pay a share of the Tenancy Fee. Tenancy Fees are due after the property has been seen and the decision to rent it is taken. A Tenancy Fee Declaration form has to be filled in and part of the fees will be collected. The rest will be collected when you sign the Rental or Tenancy Agreement and move in.

shutterstock_140195044Additional Person and Permitted Occupier Fee

Every additional person who joins the household will have an extra fee covering the cost of processing the paperwork and applications. The Permitted Occupier fee is for those near or over 18 years of age, who will be staying at the property for a while. This is only allowed with the landlord’s written consent, and certain rules must be adhered to.

Pet Deposit Fees

Pet deposit fees cover the costs of any damages to the rented property, caused by pets. This deposit, along with the security deposit will be returned at the end of the tenancy.

While this is a comprehensive list of the expected costs of renting a property, it is by no means an all-inclusive list. Taking the time to do your own research will definitely pay off!

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