What costs to expect when renting a property

If you are renting a home for the first time, lettings agency fees can come as a nasty surprise. Get prepped on what to expect with this short guideIn 2016 Autumn Statement, the Chancellor, Philip Hammond announced he would place an outright ban on lettings agent fees charged to tenants.The Government has now confirmed plans to implement the ban on all new tenancies signed after June 1, 2019.One of the Government’s main concerns with letting agent fees is that, while they must be clearly advertised, they’re not regulated or even uniform. That means upfront costs to rent a home can differ according to location and agent.But that's not to say you can't get a benchmark. Here's a round-up of the kind of fees you could encounter before the ban takes effect:Before you move in…Holding depositPotential cost: £200-£500This is a sum charged by the lettings agent to ‘reserve’ the property and take it off the market. The amount varies but one week's rent is a good benchmark.However, as the amount is subtracted from your main deposit which is returnable at the end of your tenancy, a holding deposit is not really a fee. You'll only lose the money if you don't proceed to signing the agreement after the property has been taken off the market.Contract/ administration feePotential cost: £350This fee covers drawing up the contract (usually an Assured Shorthold Tenancy agreement) as well as any other administrative tasks such as the inbound inventory, phone calls and photocopying.Reference checksPotential cost: £75-£100 per personThis pays for the agent to run references on you and anyone else named in the contract. They’ll usually contact your current employer and/or previous landlord. If you are using a guarantor, they’ll be referenced too.Credit checksPotential cost: £50-£100 per personThis pays for the lettings agent to conduct a credit check on you using a credit reference agency such as Experian or Equifax. Even if just one of you is responsible for paying the rent, the agency may still credit check both of you.Once you're in the property…Tenancy renewalPotential cost: £150-£180This pays to renew your contract at the end of the tenancy agreement should you choose to stay on at the property. This is also the time at which the landlord is at liberty to put the rent up.Amendment to contractPotential cost: £100-£120This could be payable if you require the existing contract to be amended. For example, you want to change the term or swap a housemate.Unpaid rentPotential cost: Around £30 per paymentYou will need to set up a standing order so your rent comes out of your bank account directly. However, if there’s not adequate funds and the payment bounces, your lettings agent or landlord may charge you (your bank might too).Early terminationPotential cost: Up to £300 per personIf you want to leave before the tenancy agreement ends and your landlord doesn’t agree it, not only will you be liable for the outstanding rent, you could be hit with early termination fees too.When you're checking out…Checkout feePotential cost: £100-£300This will pay for the outbound inventory, where the agent will check everything is in order with the property when you leave and that it’s been cleaned to the appropriate standard.Deposit deductionsPotential cost: Up to the cost of your initial depositIf the lettings agent finds any damage to the property or any items missing from the inventory, they could deduct the cost from your deposit.So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:Facebook: www.facebook.com/asktheestateagentInstagram: www.instagram.com/asktheestateagentTwitter: www.twitter.com/asktheEAWebsite: www.asktheestateagent.co.ukSo don’t forget to contact us with any subjects you would like us to cover or questions you would like answering in the coming episodes and until next time I would like to thank you for listening and goodbye for now.Source: Zoopla Hosted on Acast. See acast.com/privacy for more information.