In an article by the Brooking Institute, it was revealed that the rate of homeownership within the UK has declined since the pandemic and the rate of renting has increased. The reasons behind their statistics were varied and played heavily on history; neither of which is the focus of this post. What we hope to take from their study is the fact about the decline and how it informs us about how many young Brits are possibly looking for a guide on how to become renters. So, here it is: covered in this article are five things you need to know before you start renting.
Length of tenancy
There are three types of tenancies within the UK: short term, medium-term and long-term. As a general rule a short term tenancy spans a period under six months, whereas a medium-term tenancy spans anywhere between six months and a year. A long term tenancy, as might have been imagined, is any period that exceeds a year. Most landlords offer tenancies for a fixed term of 6 or 12 months. However, it is possible to negotiate a longer tenancy. Alternatively, you could agree to a tenancy which rolls over on a weekly or monthly basis.
Please note that it is often the case that a short term let, though convenient, is the most expensive. For example, the Residential Landlords Association (RLA) shows that the average price for a single night in a home listed on Airbnb in London is £137. On the other hand, the median for long term rentals in the capital averages at a price of £56 per night. That’s less than half of the earlier price quoted! In light of this fact, it is important to determine the amount you can pay per month for rent. For some Brits 35% of their take-home pay is all they can afford. However, these Brits typically don’t have children, so if you are a parent, your affordability percentage would be less; because your outgoings are substantially more.
Types of rental properties
The option exists to either rent a house or an apartment, so you need to decide on which works best for your current lifestyle. The approach to acquiring each is identical; therefore knowing what to expect in both instances is the purpose of this sub-section.
Whenever you’ve found a house or apartment to rent, the next step is to sign a tenancy agreement . Most contracts can be for 6 – 12 months with the option to extend your stay at the end of the agreement. ATTENTION!!! Please ensure that you read your contract carefully. Not infrequently, you will find that rental contracts carry the following information:
- Your (and your landlord’s) name and contact details;
- address of rental property;
- dates of the beginning and ending of your tenancy agreement
- rental fees with payment dates;
- dates and frequency of rental review;
- security deposit and conditions for getting it back;
- deposit protection scheme (your landlord is legally obligated to place your rental deposit in a DPS);
- extra fees, if any;
- who is responsible for which type of repairs; and
- subletting rules.
Another thing to note is that you will be asked to pay the security deposit (usually equivalent to a month’s rent) that’s printed under the ‘security deposit’ field. You may also be asked for the following documents on the day of renting:
- Proof of ID
- Proof of legal work permit/visa
- Proof of income
- Letter of confirmation of employment from your employer
- Copy of employment contract
- References from previous landlords
Through whom will the property be rented
There are two ways to secure a property for rent; one is directly from the landlord and the other is through a letting agent. If you choose the former channel, please ensure the landlord belongs to an accreditation scheme. A voluntary accreditation scheme is an arrangement under which suppliers of rented housing voluntarily agree to meet a set of benchmark standards. These standards relate to the following:
- the physical condition of the accommodation
- housing management
- the relationship between landlord and tenants
The National Landlords Association, the Residential Landlords Association and the Guild of Residential Landlords run national schemes, so make sure your chosen landlord is accredited by one of these.
Now, if you allow a letting agent to procure the property on your behalf, make sure they are a member of a redress scheme. To learn more about these schemes please read the documents here. Letting agents come in many guises, but the best are the ones that are accredited through a professional body such as ARLA Propertymark, GPP, Safeagent, RICS or UKALA.
Entitlement to Housing Benefit or Universal Credit.
If you are eligible for either of these benefits you are welcome to use them to help with your rent payment. Please note that these payments are made directly to the landlords in areas like Scotland and Northern Ireland. If you are renting in England and Wales , however, you will be responsible for paying your rent directly to your landlord. If you are renting from a private landlord you may receive up to the Local Housing Allowance (LHA) rate to cover or help with the cost of rent. If you are unclear about the benefits we have mentioned, please refer to the advice found about managing rent payments on Universal Credit. Having the knowledge of whether parts of your rent can be covered, will go a long way in informing how you go about renting as well as decide what you will rent.
Permitted Fees.
The UK government has determined the fees that letting agents and landlords are prohibited to charge tenants, as well as the fees that are permitted. Their guidance is found within the Tenant Fees Act, below is some of the information that is contained in the law.
Permitted fees are as follows:
- rent
- a refundable tenancy deposit capped at no more than 5 weeks’ rent where the total annual rent is less than £50,000, or 6 weeks’ rent where the total annual rent is £50,000 or above
- a refundable holding deposit (to reserve a property) capped at no more than 1 week’s rent
- payments associated with early termination of the tenancy, when requested by the tenant
- payments capped at £50 (or reasonably incurred costs, if higher) for the variation, assignment or novation of a tenancy
- payments in respect of utilities, communication services, TV licence and Council Tax
- a default fee for late payment of rent and replacement of a lost key/security device giving access to the housing, where required under a tenancy agreement
All other fees, including the following, are banned:
- viewing fees, any charge for viewing the property
- tenancy set up fees, any charge for setting up the tenancy or contracts
- check out fees, any charge for leaving the property
- third party fees, any charge for anything that is done by someone other than the landlord or tenant but that the landlord must pay for
Conclusion
Renting, no doubt, is a faster way to procure a home anywhere in the world. It also carries the benefit of relieving tenants of the responsibility to service the properties in which they live. This latter responsibility is the landlords’ and they must ensure that standard repairs are made to the following structures:
- the structure and exterior of the property (e.g.walls, windows, external doors and stairs);
- drains, gutters and external pipes;
- basins, sinks, baths and toilets;
- gas appliances;
- electric wiring heating; and
- hot water.
So if the benefits and speed of acquisition appeals to you, we hope this guide has helped you in learning about the initial processes and steps to renting a property in the UK. Read more articles like this here.