By Matt Fernell, Editor-in-Chief at Finance.co.uk. Last updated 31st January 2023.
Did you know nearly 1 in 5 households in the UK live in privately rented properties?
It’s long been infused into British culture that home ownership is the ultimate goal to aim for and many headlines in the mainstream media focus on homeowners and their mortgages.
But the reality is, millions of people are unlikely ever to be able to afford a house, put off by the eye watering price of property in this country, coupled with expensive mortgages - that are predicted to get even more expensive in the near future.
With millions of young people now facing a lifetime of renting, we think it’s important you know your rights as a tenant and the property owner's responsibilities.
Renting is becoming increasingly popular, and the average monthly rent is rising, so there are several things to think about.
When you start looking for a place to rent, you’ll need to have a budget in mind.
What you can afford will depend on your circumstances, but remember, your rent isn’t the only expense that comes with being a tenant.
You need to make sure you can also cover the cost of all your other bills, such as energy, water, council tax, broadband and food. Plus, any monthly outgoings you already have, like mobile phone bills, subscriptions, commuting costs and insurance.
Don’t forget that typcially you’ll also be asked to pay a deposit along with the first one or two months’ rent upfront at the beginning of your tenancy. Deposit’s are usually about 4-5 weeks’ rent.
It’s worth noting that it’s illegal for your property owner to make you pay a deposit worth more than five weeks’ rent, though this limit is upped to six weeks’ rent if your annual rent exceeds £50,000.
You may also need money to furnish the flat if it comes unfurnished and you don’t already have furniture. If you don’t have any extra money to buy things like a bed, sofa, fridge or washing machine, it’s worth bearing this in mind when researching properties and only looking at furnished properties, or ones with certain white goods included.
To work out how much you can afford, take your current income and deduct all of your monthly outgoings, remembering to factor in council tax, utilities etc. The money you’re left with is how much you have to cover any rent, or other bills associated with your property. If this doesn’t seem enough, your first task is to see if you can reduce your outgoings by cutting back on anything that’s not essential.
Once you’ve done that, it’s worth thinking about how you might go about increasing your income.
It helps to start looking at properties with a realistic expectation of what you can afford, and remember, there may be compromises you have to make. If you have your heart set on a specific location, you may need to be willing to live in a smaller property than if you lived in another area.
So it’s important to make a list of what’s important to you; if you know you need a certain number of bedrooms, you may have to compromise on location. If a garden is essential for you, you may have to compromise on drive space for example.
Once you have a clear idea of your budget and other preferences, you can begin to research properties online and arrange viewings until you’ve found the right property.
It’s common to be asked to pay a holding deposit; this is a refundable deposit paid to the property owner or letting agent; it’s capped at one week’s rent and gives all parties 15 days to get the tenancy agreement in place. During these 15 days, no other potential tenants should be considered.
Once the 15 days have passed, if there is still no agreement, the deposit will be returned to you.
There are certain instances where the property owner or letting agent can keep your holding deposit:
During the application process, the property owner or letting agent will perform affordability and credit checks, check your identification and right to rent, and collect references.
Once happy with the outcome of these checks, the next step is to sign the tenancy agreement and pay your deposit. Make sure you read the tenancy agreement carefully before agreeing to it.
The property owner may ask for one or two months' rent upfront. If this is the case, any future rent payments will be paid a month in advance rather than the previous month.
Once you’ve paid your deposit and signed the tenancy agreement, it’s time to move in.
Most property owners or letting agents will provide you with an inventory when you move in. This will document and describe the condition of anything in the property that’s provided, and this is used to ensure that the property is left in a reasonable condition when you move out.
This is also the time for you to take out any insurance you may need; property owners will be responsible for buildings insurance. However, you may need to take out contents or tenant's insurance.
Once you’ve moved into the property, you must:
In England, property owners must check that anyone aged 18 or over living in the property as their primary residence has the right to rent.
This check must be done before entering into a tenancy agreement. This can be done either manually or using the Home Office online checking service, but not everyone will be able to use the online service.
Some property owners will also perform affordability checks, though this isn’t a legal requirement, and they can’t perform a credit check without your permission.
There is no minimum credit score requirement to be able to rent a property privately; however, with your permission, some property owners will perform a credit check.
Property owners are only able to perform a “soft search” credit check, which means that running the check won’t damage your credit score, and they will only see information about you that is already publicly available, such as CCJs, an IVA or bankruptcy.
If you have a poor credit score, there are sometimes things you can do to reassure a property owner about renting to you, like paying rent in advance or having someone become a guarantor for your rent.
A guarantor would be responsible for paying your rent if you’re unable to, so it’s not something that you should enter into lightly.
Property owners will ask for several documents when you apply for a tenancy, so it’s a good idea to be prepared. The most common are:
A tenancy agreement is a contract between you and the property owner; this can be either a written or verbal agreement.
Your tenancy agreement sets out legal terms and conditions and having one means you and the property owner have certain rights and responsibilities.
It’s essential to understand what’s included in your tenancy agreement, which is why it’s best to get a written agreement.
Your tenancy agreement should include:
Changes can only be made to the tenancy agreement if you and the property owner agree. Changes should be recorded in writing by drawing up a new tenancy agreement or amending the existing one.
Any rental agreements that started on or after the 28th of February 1997 will likely be an assured shorthold tenancy, but it’s a good idea to use Citizens' Advice to check what type of tenancy you have because it will impact your rights and responsibilities.
Any legal rights you or the property owner have by law will override anything in your tenancy agreement.
Legal rights cover things like;
It’s very common for property owners to ask for a deposit at the beginning of a tenancy. Your deposit should legally be no more than five weeks’ rent (or six weeks if your annual rent is more than £50,000).
It’s vital to collect evidence of the property's condition when you first move in, by going around the property, noting any damage. Take photographs and ask the property owner to acknowledge receipt of your inventory.
Depending on your tenancy type, the property owner has to protect your deposit using a tenancy deposit (TDP) scheme until you move out. However, this isn’t the case if you’re a lodger, live in student halls or have an assured or protected tenancy.
The TDP scheme is designed to help keep your deposits safe and help to make sure you get your money back at the end of your tenancy. There are three TDP scheme providers :
At the end of your tenancy, you have the right to get your deposit back, and the property owner or letting agent can only deduct money from your deposit with a valid reason, such as damage you have caused to the property. If you agree on how much deposit you should get back, you’ll often get your money reasonably quickly.
Money can’t be taken from your deposit to pay for general wear and tear or if there’s damage caused by repairs that were reported by you but have gone unfixed.
However, money can be deducted from your deposit if you still owe rent, damaged the property, or lost or damaged anything in the inventory.
If you disagree with the amount of money deducted from your deposit, the first thing to do is ask for the reason - if you still don’t agree, there may still be action you can take, especially if the property owner has protected your deposit using a TDP scheme.
If your deposit didn’t need to be protected, you would be able to take the property owner to small claims court if you can’t agree. However, you will likely incur some legal fees. If you win, you’ll probably get these fees back; however, you may also have to cover the property owner's legal costs if you lose.
Your rights and responsibilities as a tenant are determined by what type of tenancy you have. Not only are there different rights for private and social tenants, but the kind of private tenancy agreement you have also impacts your rights and obligations.
If you rent privately, the property owner will be responsible for most major repairs, but you’re responsible for minor repairs, such as changing lightbulbs, and anything you’ve accidentally damaged.
In most cases, the property owner is responsible for the repair and maintenance of the following:
Additional maintenance responsibilities of the property owner can include:
As soon as you notice something that needs repairing or a maintenance issue, get in touch with the property owner (or letting agent) as quickly as possible - it’s best to do this in writing so that both parties can keep a copy.
The property owner should carry out all repairs in a “reasonable” amount of time. In this context, a reasonable amount of time will depend on the problem; some things will need to be repaired more urgently than others.
By law, the property owner needs to ensure that your home meets electrical and safety standards, and they must give you copies of the safety reports. There are only two instances where it’s not a legal requirement to perform these checks;
A qualified electrician must check any wiring, sockets or appliances provided and these inspections must be conducted every five years.
The property owner must get a Gas Safe registered engineer to conduct a gas safety check every 12 months.
You should be given copies of the certificates from the electrical and gas safety inspections within 28 days, or copies of the most recent one carried out when you first move in.
When you begin renting, your tenancy agreement should state how much rent you need to pay and when.
You must pay your rent on time; if you don’t, you’ll be in rent arrears, and the property owner might be able to evict you.
If you know you can’t pay your rent, get in touch with the property owner ASAP; they might be willing to give you extra time to pay if you explain your situation.
You should also research if you’re entitled to any benefits or grants to help with your rent payments.
If the property owner wants to increase your rent, they need to follow specific guidelines, though these rules will depend on what type of tenancy you have.If they don’t follow the rules, you’ll be able to challenge any rent increases, but only as long as you don’t start paying the new, higher rent.
With assured shorthold tenancy, the property owner can increase your rent based on the average cost of similar properties in your area. However, they cannot increase your rent during a fixed-term tenancy agreement unless there’s a rent review clause.
If your fixed-term tenancy has ended and you sign a new tenancy agreement, the property owner can increase the rent; however, this will need to be in the new agreement.
If your fixed term has ended and you haven’t signed a new tenancy agreement, the property owner must give you a section 13 notice before increasing your rent.
If you don’t have a fixed-term agreement, the property owner can increase your rent if you agree; this includes if you previously agreed to a rent increase at a certain point in your tenancy agreement. If you don’t agree to the rent increase, they must use the section 13 notice.
The section 13 notice can only be used to increase your rent every 52 weeks, and the property owner will need to give you at least a month's notice, though this changes depending on the length of your tenancy period.
If you’ve been given notice to vacate your rented property, there are specific rules that will need to be followed. Check the Gov.uk website to find out what the property owner would need to do to legally evict you.
If you have a fixed-term tenancy and reach the end date, you don’t automatically have to leave the property; you will need to discuss with the property owner if you want to renew your tenancy on either another fixed tenancy or on a rolling basis.
You'll need to notify the property owner if you want to leave the property. The amount of notice you will need to give will depend on whether or not you have a break clause in your tenancy agreement, and what type of tenancy you have.
You can learn more about ending your tenancy on the Citizen's Advice website.
As a tenant, you’re responsible for looking after the property whilst living in it, and you’ll often be responsible for minor repairs and maintenance, such as changing lightbulbs.
When you leave the property, you should leave it clean and in good condition. Use the inventory you received at the beginning of your tenancy to ensure you’re leaving the property close to the state it was in when you moved in.
Property owners can’t deduct money from your deposit for general wear and tear, but they can charge for damage you’ve caused, so it’s a good idea to pay to clean the oven and the carpets.
Ensure you remove any rubbish and take all of your belongings with you, because you could be charged for removal.
The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.
