Rental Fees… What to budget for

Rental fees have been a hot topic for some time now and with the government taking a bold stance in the 2016 Autumn Statement when the Chancellor, Phillip Hammond announced an outright ban on letting agent fees charged to tenants. Although the Tenants Fee bill is still not finalised and not thought to be implemented until 2019, they will soon be a thing of the past. Here is our rental guide to how much should you put aside for your tenancy, if you’re planning to rent before then.

As an independent property management business it has never been in our company’s ethos to charge extortionate fees to our tenants, our rental fees and requirements are clearly stated on all property listings, both on our own website and Rightmove page before you view. We explain all fees and requirements before handing out application forms for our properties.

Here are all our rental fees before, during and at the end of the tenancy:

BEFORE YOU MOVE...

Referencing Fee                                            Cost: £250 per property

  • A Guarantor is required for all our properties. WHY? This is our company policy and you never know what the future holds just in case you fall short on the rent under any circumstance you can turn to your guarantor to help you out. Your guarantor is referenced free of charge.

Deposit Insurance                                         Cost: £30 per property 

  • Your deposit is held, by law, in a Government-backed Tenancy Deposit Scheme (TDS)

Total due at time of application is £280, via cash, bank transfer or debit card.

What about the deposit? Rental deposit of 1.5X monthly rent, which is paid together with your first month’s rent and is refundable at the end of the tenancy.

DURING THE TENANCY…

Tenancy Renewal Fee                                    Cost: £50 per property

  • Bear in mind there might be a slight rent increase at this point.
  • Amendments to contracts will be treated as a Tenancy Renewal Fee

END OF THE TENANCY ….

Deposit Deductions – It is not in our company’s interest to deduct any of your deposit when you leave our property and with regular property inspections we know the condition of our properties. When tenants give their full one months’ notice we send them our pre-exit requirements and set up a pre-exit inspection to work with you to get the property up to our standard before you leave. We do except proof of professional carpet and window cleaning before you vacate the property which some tenants opt to have deducted from the deposit. After the pre-exit inspection, we have the final exit and key handover.

There are no hidden fees or fee increses with Seven Property, only the fees stated above.

One of the Government’s main issues with letting agent fees is that, while they must be clearly advertised, they’re not regulated or even uniform. That means, until the new bill is passed, upfront costs to rent a home can differ according to location and agent. 

Here's what you may expect to be charged by other agents and landlords via Zoopla’s research into rental fees:

BEFORE YOU MOVE IN… Other Agents and Landlords

Holding Deposit                                                 Potential Cost: £300- £500

  • Charged by some agents to take the property off the market, the amount can vary but is usually one week’s rent. However the holding deposit is subtracted from the first month’s rental payment, it’s not a fee. Only if you back out and don’t sign the agreement, you will lose some or all the deposit.

Contract/ Administration fee                             Potential Cost: £350

  • This fee covers drawing up the contract (usually an Assured Shorthold Tenancy agreement) as well as any other administrative tasks such as the inbound inventory, phone calls and photocopying.

Reference checks                                                Potential Cost: £75-£100 per person

  • This pays for the agent to run references on you and anyone else named in the contract. They’ll usually contact your current employer and/or previous landlord. If you are using a guarantor, they’ll be referenced too.

Credit Checks                                                     Potential Cost: £50 - £100 per person

  • This pays for the lettings agent to conduct a credit check on you using a credit reference agency such as Experian or Equifax. Even if just one of you is responsible for paying the rent, the agency may still credit check both of you. 

Rental Deposit                                                   Potential Cost: 1 month to 1.5x monthly rent

  • Paid together with your first month’s rent, your deposit is held, by law, in a Government-backed Tenancy Deposit Scheme (TDS) and is refundable at the end of the tenancy. If the lettings agent finds any damage to the property or any items missing from the inventory, they could deduct the cost from your deposit.

DURING THE TENANCY…

Tenancy renewal                                                 Potential cost: £150-£180

  • This pays to renew your contract at the end of the tenancy agreement should you choose to stay on at the property. This is also the time at which the landlord is at liberty to put the rent up.

Amendment to contract                                      Potential cost: £100-£120

  • This could be payable if you require the existing contract to be amended. For example, you want to change the term or swap a housemate.

Unpaid rent                                                        Potential cost: Around £30 per payment

You will need to set up a standing order so your rent comes out of your bank account directly. However, if there’s not adequate funds and the payment bounces, your lettings agent or landlord may charge you (your bank might too).

Early termination                                              Potential cost: Up to £300 per person

  • If you want to leave before the tenancy agreement ends and your landlord doesn’t agree it, not only will you be liable for the outstanding rent, you could be hit with early termination fees too.

WHEN YOU LEAVE….

Checkout fee                                                      Potential cost: £100-£300

  • This will pay for the outbound inventory, where the agent will check everything is in order with the property when you leave and that it’s been cleaned to the appropriate standard.

Deposit deductions                                            Potential cost: Up to the cost of your initial deposit

  • If the lettings agent finds any damage to the property or any items missing from the inventory, they could deduct the cost from your deposit.

Research via https://www.zoopla.co.uk/discover/renting/rental-fees/#OxeJkxVwHATke6CD.97