Searching for a place to rent? Don’t forget to get your finances sorted first.
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Before you fixate on finding the perfect home to rent, you need to give some serious thought to your finances and exactly what you can afford. There's little point viewing potential homes - either in person or online - if you haven't worked out all the costs and got your finances arranged in advance.
Here are some of the key things you need to consider before you start searching for a flat or house to rent:
1. How much can you afford to pay in rent each month?
As rent is going to be your biggest housing cost, your first priority needs to be working out exactly how much you can afford to spend on this each month.
If you’ve rented before, you will know roughly how much you can afford, based on your earnings.
But if you’re renting for the first time, you need to do your sums carefully, as you don’t want to end up over-stretching yourself. Set aside some time to sit down and do some serious budgeting so you know what rental price bracket to search in.
Hard as it may be, resist the temptation to look at more expensive properties if you know they are out of reach.
Be aware of the financial difference if rent is advertised ‘by the week’ as opposed to ‘per calendar month.’
You might think a weekly rent of £300 means a monthly rent of £1,200, but this is not the case.
For a property advertised at £300 per week, you need to multiply this figure by 52 (in this case, £15,600). You must then divide this annual figure by 12 to get the monthly rental amount (in this case, £1,300).
While this may not seem like a huge amount more, for some, that extra £100 a month could be the difference between a property being in your price range – or just outside it.
2. How much will you need for a deposit?
Generally speaking, you will need to hand over no more than five weeks' rent (six if the annual rent is over £50,000) upfront as a deposit.
Don’t forget you will have to pay this at the same time as your first month’s rent, so this could make a hefty dent in your finances.
3. What bills will you need to budget for?
As a tenant, you are responsible for paying council tax. The amount you pay depends on your rented home’s valuation, the banding of your property, and your local authority. To find out more about your council tax, contact your local council. You can find out more about council tax bands and discounts here.
Check your tenancy agreement to see if you are responsible for paying the gas, electricity and water, or if you pay for these as part of your rent.
Also check your paperwork to see if you are required to pay service charges for gardening, or the cleaning of communal areas.
In addition, don’t forget to factor in expenses such as phone, broadband, a TV licence, and contents insurance.
If possible, have a quick chat to the existing tenants to find out roughly how much they are paying each month for their utilities and other bills, as this could help you with your budgeting.
4. Will you need money for furniture?
If you’re planning on moving into a furnished property, you won’t have to spend money on a load of furniture, but if you’re moving into an unfurnished flat or house, you’re going to need to budget for all the items you need to kit out your new home.
While you may be able to beg and borrow some stuff from family or friends – or pick up certain items cheaply on sites such as Gumtree or eBay – if you need to buy beds, wardrobes, tables and chairs, costs can soon mount up.
Fail to budget carefully, and you could be sitting on the floor for quite some time after moving in.
5. Have you got the paperwork required?
Before allowing you to move into a property, a landlord or lettings agent will want to ensure you can afford the rent – and that you will be reliable in paying it.
To check that you are responsible, they are likely to ask for proof of character in the form or references from your current landlord and employer. They will also request documentation to show proof of your income.
In addition, they may well want to run a credit check on you with a credit reference agency.
This will give them information about your previous record on paying back debts – and tell them whether you have any County Court Judgements (CCJs) against you.
Only once a landlord or lettings agent is happy with all the checks and references, will they give approval for you to rent the property.
- Get ahead of the game and check your credit score yourself before your landlord or lettings agent checks it. You can get a copy of your credit report from a credit reference agency, such as Equifax, Experian or TransUnion
- Take action to improve your credit score. Simple steps include: registering on the electoral role, making sure you make all payments all time, and closing down any accounts you no longer use