“Your present circumstances don’t determine where you can go; they merely determine where you start.”
Nido Qubein –
America Businessman & motivational speaker
Renting a home
Renting is a state of mind.
So is success.
Most all of us at some point in time will rent space. Renting a home is longer term, and given that over 40% of Germans rent their home rather than buy, it’s also just a state of mind. In the UK, it is often perceived as a failure, but to more and more UK residents, it’s also becoming seen as a necessary ‘evil’.
Before you can fully jump onto the property ladder, it’s a good idea to look into renting a home. Not only will it start to give you an idea of the sort of costs that will be coming out of your wages, but it will also start to establish some independence and build your own space outside of the family home.
Rental properties are not only for those stepping forward into adulthood however, as they can be a handy step for any existing homeowner looking to sell before purchasing their new home.
Here To Help
As with everything in life, renting comes with its fair share of positives and negatives, one main downside being that it can cost more monthly than buying a property. However with markets often unreliable and the cost of living forever increasing, its seeming the logical option for those wanting to spread their wings.
Across all the pages in this section, we provide a series of guides to help you find what you should be looking for, particularly when it comes to renting a home, so when that time comes, we can help you…
CHOOSE THE ADVISER WHO UNDERSTANDS YOUR NEEDS.
Rent or buy?
Unfortunately, it is often better value for you to own a property than rent, however saving up the required deposit can take years unless supported by family and when renting, you may find you have less disposable income to put aside into savings.
However, renting can work out cheaper than buying. If you invested a deposit amount instead of spending it straight away on a home, you could actually be better off for nearly a decade with all other factors equal. It could potentially be up to nine years before the total cost of renting takes over the cost of buying.
Why is renting a good idea after flying the nest?
- Flexibility – You are less tied to properties, so can move between places quicker and with less red tape.
- Maintenance – If you find a property with a good landlord, any major upkeep or services within the house will be taken care of for you. You’ll still have to change lightbulbs, or unblock a blocked sink, but is suddenly you have no hot water, or a boiler service is needed, the landlord should have it covered.
- Furniture – If the property you find comes furnished, you’ll save yourself a few pounds on the essentials. Even part furnished properties are helpful in making a house feel like a home.
What if I’m between buying properties?
- You’ll hopefully find yourself in a stronger position to negotiate a lower price on your new property as a cash buyer.
- You’ll have shortened the chain. Not needing to wait for someone to buy your existing property means there is a lot less chance of any sales falling through, meaning you only have to negotiate two sales, instead of potentially many more.
- You’ll feel more on the road to your forever home. Making a step towards a new property is bound to make you feel positive during your house purchasing process.
So, would I have any legal rights as a tenant?
There are many rights that you should have as a tenant in a property, below is just a few. However, you may still find yourself needing legal aid should disagreements occur over charges, fairness or excessiveness so make sure you are prepared.
- To live in a safe, hygienic and secure property
- Be aware of who your landlord is, and their contact details should anything go wrong with the property.
- Have a signed contract and agreement for your residence in the property.
- Not being evicted for unfair reasons.
- A protected deposit that is only kept back if damages need to be paid for.
- The right to challenge any charges if you feel they are excessive or not required.
- 24 hours’ notice before a landlord enters your living space.
I’m in! What am I responsible for now?
So, you are all set up and moved in. The good times can begin! But you are now responsible for what is technically, someone else’s property, so there are things you must agree to adhere to before you make the move.
- You must ensure you always make rent and pay household bills, not only to ensure they are gaining from their property, but also to help with your own budgeting and credit score. Proving you can make regular payments can only help when it comes to eventually applying for a mortgage.
- Regular landlord inspections should become a norm, and as long as you’ve had the required notice, you should allow them to be carried out as thoroughly as possible.
- Sub-letting is possible, meaning you charge someone outside of the property to rent a room. However, this is often frowned upon and you must get permission from the landlord before you even consider it. Make sure you’ve got a solicitor on hand if you’re planning to do this, they can cover any finer details.
I’m moving on – will I get my deposit back?
If you take good care of the property, by law you are entitled to a full return of your deposit. This money is protected by the landlord and the Deposit Protection Scheme (DPS) and is rightfully yours if all agree that the property has been left in a suitable state. However, this can be a contentious issue, with disputes easily made around minute details. If you’re having difficulty, it’s worth involving a solicitor however, here are some of the best ways to protect your money.
- Read your inventory thoroughly when you first move in, taking note of anything that is already damaged, broken or unusable. If they feature in the inventory, any arguments against your claim shouldn’t have a leg to stand on.
- Refer to the tenancy agreement to make sure you’ve cleaned everything detailed before you move out.
- Speak to your landlord as soon as you’ve noticed its broken and see if they will accept you paying to fix it, rather than taking the money from your deposit. That lump sum nearer the time of purchasing a house may be more useful than the odd spends here and there.
- Take photos of the property before you leave as evidence of the state you left it in or the furniture you decided to leave behind.
Some summary tips for rented accommodation:
- Make sure you shop around. At the end of the day, your rented home is still your home, so you want to ensure you’ll feel comfortable and safe while living there. Check the conditions, the neighbourhood and for anything that would make you feel uncomfortable, just as you would if you were buying the property.
- Resist the urge to rush in despite the competitiveness of the rental market, patience always pays off!
- If you’re living with others, make sure you choose them carefully! Everyone has different habits that you wouldn’t always see outside the home so make sure you’re sure you’d be comfortable living with them! Basic rules such as dividing up chores can make a home a happy home, and make sure they’re good for paying bills and rent – you don’t want to be digging them out of a hole every month!
- Avoid any joint account for bills and rent – this can affect your credit rating when it comes to mortgage application.
- Make sure you have insured your belonging – they’re not normally covered by any landlord insurance.
- Make sure all meter readings, gas safety, smoke alarm checks have been done as soon as you move in and make a note of these!
The new Tenant Fees Act – when does it come in?
This new law was passed in February 2019 with a ban on tenant fees put in force from 1st June.
The bill also includes plans to introduce a cap to the holding deposit amount, set at one week’s rent, with more requirements on returning this deposit.
Eco friendly
From April 1st 2018, new private properties for rent are generally required to have a minimum of an E on the Energy Performance Certificate rating scale. This comes into effect for existing tenancies from April 1st 2020, and will make any breaches of this rule unlawful.
Abacus Associates manages the personal wealth of many people across the UK and over £1 billion of investments, providing clients with financial advice and access to investment products and services.
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