The law has recently changed for tenants in the UK, making the process of renting fairer and cheaper. Property expert and author Louisa Fletcher explains what the new rules mean for you.
There’s this idea that we Brits are a nation of homeowners, but around a quarter of us are living in private ented accommodation 1. And while some people still think that renting means you’re throwing away money, there are a few reasons why renting is actually a good idea.
In favour of renting
If you’re looking to become a homeowner in the future, then renting is an opportunity to try before you buy.
That could mean trying a new area before you commit to buying there, especially if you don’t know it very well. Or, if you’re living with a partner for the first time, renting together first lets you make sure you’re ready to take on the massive financial commitment of a joint mortgage.
So, when you look at it that way, renting could save you from making a costly mistake in the future!
There’s also another thing about renting that’s often overlooked: there are periods in everyone’s life when it might not be the right time to own a home.
Alternatively, if you’re just starting on the career ladder, for example, you might not be ready to put down roots in a particular location just yet.
Whether you’re renting for the short or long-term, happily or unhappily, there have been a few changes to the law recently designed to make renting fairer and save you money.
A cap on deposits
As of June 2019, tenants are no longer subject to rental agreements that insist they pay large sums up-front.
Thanks to new legislation, landlords are now only allowed to charge a maximum of one week’s rent for holding deposits. Then, depending on how much rent you pay, most deposits will now be capped at the equivalent of five weeks’ rent.
That’s unless you pay more than £50,000 a year in rent, in which case your deposit will be capped at the equivalent of six weeks’ rent.
Some of the fees that you used to have to pay as a tenant have been banned as well – including credit checks, tenant referencing and inventory fees. Your landlord now has to pay for all of these.
You can still expect to pay the usual household bills like utilities, TV licence, council tax and phone and broadband. And, if you decide to end the tenancy early or if you make other changes to your tenancy agreement, you may be charged administration fees.
You’ll also have to pay any reasonable additional costs you incur during your tenancy, such the repairs to any damage you’ve caused, or if you lose your keys and have the locks replaced.
Get the most out of renting
There are some new options available for cutting the upfront costs of renting, or even getting your rental payments to work harder for you.
For example, some credit referencing agencies now count your rent payments towards your credit score. This means if you always pay your rent on time, it could improve your chances of getting a mortgage if you decide to buy in the future.
Some new schemes offer you the chance to avoid paying a lump sum as a deposit altogether, by purchasing a specific insurance policy upfront instead.
This means your cash isn’t tied up in someone else’s bank account, plus it’s far less money for you to find before you move in.
This is just a snapshot of what you need to know, based on English law. So, before you sign on the dotted line, find out what’s relevant to your circumstances and speak to a professional to get advice about your legal rights.
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