Wondering what are the common costs?
What costs need to be paid to make the renting process complete?
Will the deposit be refunded?
Is there any possibility that the landlord or agent might trick us into paying more money than necessary?
BACCOM has all the answers for you! This article will guide you on the 6 main costs required to pay to the landlord or agent. Keep in mind, it's a bit like a choose-your-own-adventure—specifics vary based on your place and landlord.
1. Holding Deposit: Reservation Fee
‘The Holding Deposit fee’ or a 'Reservation Fee' is the first cost paid as soon as possible to the agent or landlord as a confirmation before proceeding to another process. Normally, this holding deposit fee will be paid either directly to the agent or the landlord and is usually deducted from the initial payment. So, take a moment and weigh your options before making it official! The minute you decide, 'This is the one!', it's time to drop this fee to the agent or landlord pronto as a 'Reserved' sign, freezing the property from the market hustle. But here's the secret! Once you've committed, there's no turning back, and it's non-refundable even if you have a change of heart.
2. Tenancy Deposit: Accommodation Deposit
Think of your Tenancy Deposit as a safeguard for the landlord's property. – it's there to cover any unexpected bumps or scrapes which will be refunded back in full upon moving out, as long as there is no damage to the house.
According to the latest law, the Tenancy Deposit now maxes out at 5 weeks' rent. This deposit is like a trust fall—totally refundable at the contract finish line! Whenever it's time to move out, the landlord or agent quickly inspects the room. If there are any scratches, you're responsible for them. But don't stress about it, because the repair expenses will be deducted from the deposit, and whatever's left will be returned to you!
3. Rent in Advance / Advance Rent Payment
Generally, the agents or the landlords prefer long-term contracts, usually with a duration of at least 1 year, and require only 1 month in advance. However, for international renters, having a UK-based guarantor or a 1-year upfront payment as a sign of commitment for the whole contract ride is typically required.
But, don't stress about the contract! 📜✨ We're all about finding solutions—negotiating with the agent or landlord to split payments every 6 months or a 1-year deal with a '6 months Break Clause'? is also the way to go.🏡🌏
Need a helping hand or some top-notch advice? BACCOM's got your back! 🤝💂♂️ Just drop us a line, and we'll be ready to guide you through those landlord and agent talks.
*A guarantor is someone who is based in the UK and ensures that the renter will make payments as agreed and on time. They are required to provide their credit card details to the agent, allowing the agent to charge for the month in case the renter forgets to make the payment.
UPDATE - The costs no.4-6 below are now off the table!! Thanks to the Tenant Fee Act 2019 ☺️ Despite the recent legal changes leading to the cancellation of all costs, we wanted to share some information just in case anyone is curious. So, if the agent tries to sneak these in, you’ve the right to drop a complaint via this link Tenant Fees Act - GOV.UK
❌ 4. Admin Fee / Letting Fee: Agent’s processing fee
Cancelled: For the scoop, agents usually charge anywhere from £50 to £700 per person. The Admin Fee is important for the services they provide to renters. Sadly, this admin fee is a one-way ticket—won't be bouncing back. And if the company's a big shot, the price tag might catch a lift too!
❌ 5. Reference Checks: Background Checks Fee
Cancelled: In the UK, there are strict rules in place to guarantee the safety of landlords. Back in the day, the agents or owners might have asked for a fee for this service, but nowadays, there is no longer such a fee.
❌ 6. Credit Check: Cost of checking the renter's credit.
Cancelled: In case you’re not paying upfront, the agent may ask to check your financial capacity. To make sure you can meet the agreed-upon payments, the agent must pay the inspection fee through a Credit Reference Agency such as Experian or Equifax. These costs will be charged as a Credit Check fee.
Here are your must-know costs to keep in mind when renting accommodation in the UK.
Make sure to double-check all the figures in the contract before signing to make sure everything adds up correctly!
Certainly! If you have any questions or need a hand, we're all ears and here to lend a friendly nudge in the right direction. 😊
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