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Renting costs on the rise
Are you a renter? If you are, you should read this because a recent article in the Guardian highlights that renters are facing the highest rent increase for more than 18 months. And research conducted on our behalf shows that landlords are increasing rent by an average of £84 per month at the end of each tenancy agreement.*
So why are renters facing such a hike in prices? One of the biggest factors is a general lack of housing in the UK – there are simply more people looking for homes than there are homes available. This creates demand, which allows the landlords and agents to increase their monthly rental prices, as for every flat that becomes available, there’s a queue of prospective tenants waiting to snap it up.
But the monthly rent you’ll pay is only one of a number of costs you’ll have to stump up if you want to rent. You’ll also need money for the:
The first things you’ll be asked to pay, if you decide that you’d like to go ahead and apply for a tenancy, is a holding fee. This is pretty standard and is an amount of money you’ll be expected to pay to take the property off the market, essentially the agent will not show it to anyone else. If the application process fails, you should get this back – check that this will be the case if there’s nothing detailed about it on the website.
Renewal of contracts
This is a service that lots of agents and landlords appear to overcharge for – our research showed the average cost is over £100. And it can come across as just another way for the agents to make a bit of cash out of you, a viewpoint some would say is justified. Of course, the agency will point out that they have to dedicate staff and time to carrying out any task for you or the landlord, so to charge for their time is only fair. And it’s worth noting that there are agents who charge nothing for this service, so always ask if the agency charges for contract renewal.
Referencing and Application fees
There’s also the hundreds of pounds you’re expected to pay for referencing, application fees and check-in’s, that you’ll have to stump-up before you’ve even had any firm offer of a tenancy. These fees can range from as little as nil – some agencies charge nothing for the application process – right through to £400 for one person. Again, you have to decide if you think that what your been asked to pay is fair for the work involved. Keep in mind that credit checks can purchased for as little as £25.
That’ll do for now. Come back next time for more help navigating through the world of agency and landlord fees.
*Red Dot questioned a nationally representative sample of 2,000 adults aged 18 and over between 21st May and 26th May 2015, of whom 628 were Scottish residents.