Looking to rent? How to easily find a rental property?
Everyone who has ever had to go through an agency for rent is familiar with often their seemingly impossible criteria and astronomical sums required to rent a home. If you have found yourself in this situation you have surely asked yourself what is the reason for the significant fees required by agencies to rent a flat. It is preferable when possible to rent directly from a private owner. Agencies pile on a lot of secondary and tertiary fees so you should attempt to rent your next home or room directly from the landlord by contacting them, this will save you a lot of time money not only during the initial renting period but also in the long term because as soon as the duration of your contract is up you have to pay renewal clauses to the agency amongst other fees.
We will answer one simple question- How can I rent a home without going through an agency we will also quickly describe what is a tenancy agreement or contract, what clauses should be included in your tenancy agreement, before looking at specific fees agencies charge and how to avoid them when you are looking to find your next home.
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The tenancy agreement is in essence a contract between you and your landlord. The contract can be verbal or written. The temporary hold of a rental property for the duration of the contract is referred to as "tenancy". The tenancy can be for a fixed duration or periodical (short-term lease) on a week-by-week basis or monthly.
Your tenancy agreement should include:
- the names of the parties that are entering the contract and their resigning rights, the address of the landlord
the price of rent and the way rent is paid
- when and under what conditions can the contract be revised
- where will the deposit be kept
- under what conditions can the deposit be withheld
- the start and end dates of the contract (the duration of the lease)
- the address of the property
- the dates the property will be occupied by you and the date the property will be vacated
- the notice required from you to vacate the property and the conditions needed for leaving the property
- responsibilities and rights of the involved parties as well as tertiary parties
- right to sublet the property to different parties
- who will cover the utilities consumed during the duration of the lease and in what way will they be covered
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Different types of tenancy agreements
1. Assured shorthold tenancies
An assured shorthold tenancy refers to a private property that has been rented after the 15th of January 1989, the property is the primary property for the tenant to occupy and the landlord should not be living in the property. This is the most common type of rental agreement for a private tenant when it comes to renting a property to occupy and has specific legal protections. A property cannot qualify as an assured shorthold tenancy if the yearly rent exceeds £100.000 and is no less than £250 (£1000 for London), the property has been rented for business purposes or has been rented by a licensed building, or has been rented as a vacation home or has been let through a council.
2. Excluded tenancies or licences
This tenancy agreement refers to instances when you are renting a room in a mutually occupied household. Usually, you will have fewer rights if you are forced to vacate the property - evicted.
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3. Assured tenancies
Assured tenancies refer to tenancy contracts that have started between the 15th of January 1989 and the 27th of February 1997. These tenancy contracts have increase protections during evictions.
4. Regulated tenancies
Regulated tenancies refer to tenancy agreements that have started before the 15th of January 1989. They have increased protections during evictions and the tenants have protections against rent increases from the side of the landlord and can require a "fair rent" procedure to be determined by a specific institution or the courts.
How to prevent problems when working with estate agencies and landlords
1. When you are renting a property often (virtually always) agencies require that you initially leave a holding deposit, in this way they guarantee that you are not going to give up on renting the property you have chosen. It is good to know that this deposit guarantees rent, the holding deposit guarantees that the tenant will rent the property from the landlord, however, it is not necessary for the holding deposit to be held in a guaranteed scheme by the landlord or the agency. Any time you are sending a holding deposit you should require a contract for that deposit because in practice often misunderstandings regarding the deposit can take place, it is not often clear what exactly happens to the deposit if, for whatever reason, you are at the end not allowed to rent the property. To this end, even an email from the agency can serve as proof for a contractual agreement, if you also pay online or with a bank transfer based on a verbal agreement, the transaction can be used as proof if you are not allowed to rent the property after you have covered the holding deposit. The holding deposit is usually transferred to the property deposit needed or for the rent for the first month if explicitly agreed in the tenancy contract.
When you have agreed on the deposit and are paying for it ask for a receipt for the sum and make sure that the receipt states what type of deposit does this payment correlate to. Make sure that the text of the receipt states "holding deposit" if only the word deposit is noted it is automatically presumed that this payment does not refer to a holding deposit.
Often agencies will run a credit check on behalf of the landlord. Some agencies will require a payment to run the credit check, most do not. Be suspicious if the agency you are dealing with requires payment for this, most do not. If you have no other choice and are going to pay for the credit check (although avoid this scenario whenever possible), make sure you do have clean credit history before paying, often these sums are non-refundable even if you do not rent the property in the end.
It is wise to check first with credit agencies. Ask which is the credit agency that the estate agents work with and make sure that you do match all of their requirements and conditions.
Request that you get in writing the minimal criteria you should meet as far as income and credit rating, criteria for renting connected to the employment status of the tenants, employment contract, restrictions for self-employed and unemployed individuals, number of the family members, kids, pets and others.
You should also request confirmation in regards to what part of the total sum that you have paid will be returned to you in cases where you do not meet the specified criteria. Find out if you will be able to get back the entire sum or part of it. Also, ask who has the final say in choosing the tenant is it the agency or is it the landlord. More often than not it is the landlord with the agency simply presenting choices, however, that is not always the case. Most agencies do not make recommendations as far as choosing the tenants, however, that is not always the case. This is why you should always ask if there are other candidates for the same property and what happens if their credit check comes back better than yours. Never pay a holding deposit if you are not sure if you will be renting the property.
If you have paid the holding deposit ask for a written confirmation from the agency that states that all advertising for the house or flat you are going to be renting has been taken down and that the property will not be shown by any other potential tenants.
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2. If you are entering the contract with an estate agency that represents the owner of the property you can make sure that the agency has the right to do so. You can ask for a formal letter from the landlord to be presented if they cannot get a formal letter you can ask for a property management contract. This check is necessary because it avoids further complications with your deposit and the transfer of responsibility between the agency and the landlord.
3. The contract should be signed on behalf of the agency by an authorized person (a person employed by the estate agency). It is preferable, although nowadays somewhat difficult, to sign the contract in the estate agent's office, not in the property. By doing so in some way shape or form you guarantee some sort of representative power and also help protect against fraud. Ask your agent for a business card, you should have their contact info, their full name and position within the estate agency. This point is important and yet often overlooked when tenancy agreements are signed. When you are going to be paying the deposit make sure you do so with a bank transfer, not in cash.
4. The tenancy agreement can be signed by the owner or a verified party but it is also good to have a witness on site that can give their credentials and full names in the contract. While not necessary it is a reassurance. What is a must though is that you and the agent have to sign every page of the contract if you have wondered why it is because it is very easy for pages to be replaced down the road if hypothetical issues between the tenant and landlord were to arise.
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5. When you are renting a property all agreements that are not explicitly written in the contract, i.e. verbal agreements, should be later on added as amendments to the contract in a written form, a letter from the landlord can also be accepted. Verbal agreements do hold legal validity under certain conditions, however, they are very difficult or often impossible to be proven. Any agreement in regards to ending your tenancy should be written. It is good to have an official written email or letter stating your intentions, if you are going to be mailing the letter save the receipt.
Problems can arise when the property is being handed over and vacated. Before you enter the property and when your tenancy ends you need to have every item and its condition in the property be written down and described in the contract. This should be signed by both the landlord and the tenant. If you disagree with certain conclusions ask for amendments and also ask for a copy of that list that you can keep. Every single item in the property, every scratch on the walls and skirting boards should be written down before you enter the property. When you are ending your tenancy this will help protect your security deposit. Also, take pictures of these areas before you begin your tenancy.
At the end of your tenancy do not vacate the property without a final inspection. The agency or the landlord will be conducting the final inspection. Make your landlord sign an agreement that states that they are taking the property back and have no notes on the condition of the house or flat, if they are any they should be explicitly stated in a written form. If your contract does not state so your landlord should present a written declaration that states when you will get your deposit back. The property should be returned in the same condition it was when you started your tenancy. While it is no longer valid for landlords to request a professional end of tenancy cleaning takes place before you end your tenancy your property should be thoroughly cleaned. Chances are parts of your deposit will be withheld if it is not. Scheduling a professional end of tenancy cleaning alleviates some responsibility, having to not only move but also make sure your home is impeccably cleaned can be challenging. A professional end of tenancy cleaning is simply a reassurance that you will get your deposit back and is something to consider when you are ending your tenancy. Be that as it may, you can also clean your property yourself, the landlord cannot demand that a professional cleaning company attend anymore. As of 2019 landlords cannot demand that a professional cleaning company conduct a final end of tenancy cleaning and withhold a deposit if you do not schedule a professional cleaning service. If your security deposit is protected in a deposit scheme ask for a letter to be sent stating the realization of your deposit by that scheme, in this way the landlord cannot have any disagreements when it comes to them returning your security deposit.
6. We will recommend that, based on the contract, you have a clear idea of what rights you have and what rights you do not have when it comes to remodelling or changing the property. Before any renovation, you should ask for a written agreement from the landlord and the agency. The agreement should include exactly what kind of work is going to be done to the property and which party will cover the costs for that work. You do need to ask for permission from the landlord for certain types of work, however, the type of work depends on the specific agreements with the landlord that are stated in your contract.
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How to find a rental property without going through an agency?
How much yearly income you should have so that you can rent a home for £1000 per month?
Most agencies calculate your yearly rent by multiplying by 2.5 so that they can calculate what is the minimum yearly income you should have to be able to match that criteria. In our case where your monthly rent amounts to £1000 multiplied by 12 months equals £12 000 for rent a year. An agency will determine the minimum yearly income you should have to be able to rent this flat or house by multiplying the total price for rent for the year, £12 000 x 2.5, which equals £30 000. In short, if you are looking to rent a flat for £1000 per month from an agency they will require that you validate at least £30 000 yearly income to be able to match their criteria.
Some agencies will even calculate the income you should have multiplying by 3, not 2.5, to be able to match their criteria. Using our example multiplied by 3 you should have at least £36 000 to be able to rent the £1000 per month property.
What additional charges does an agency take?
Most estate agencies in England will have pretty similar taxes.
Tenant referencing usually comes to about £120 per person. This charge applies to any adult that is going to be living on the property. Tenant referencing refers to any recommendations the tenants that are looking to rent the flat should present. The tenants should give specific details in regards to their employment status currently, details of their employer and income as well as their previous addresses and banking details. All of the information will be checked by the agency so that they can guarantee that you will be able to cover the monthly rent expenses for the property. You should have adequate banking details to present as well as a positive credit rating, a positive credit rating refers to you not having any outstanding payments, paying your bills on time, have not skipped payment and are not in overdraft). Most agencies will request at least 6 months of banking history and 3 months of bank statements as well.
Guarantor Referencing usually comes to £120 per guarantor. Depending on the results from your references, your income and your financial circumstances the agency may require that you present a UK-based guarantor. This is not uncommon, presenting a guarantor means that you will have to give the details of a third party that is going to pass a credit check on your behalf so that the company can be sure that there will be someone with adequate income that can cover the renting requirement and utility bills in cases when the tenant does not have the financial ability to do so. Putting it bluntly the agency will look for payment from another person you reference when you cannot pay rent or utility bills on time. The guarantor charge is taken for the credit referencing of every guarantor that is needed to cover the monthly expenses for rent and utility for the property. The guarantor should be written in the tenancy agreement via a guarantor act, their responsibilities as a guarantor should be explicitly written in the agreement. A guarantor is only necessary in cases where you cannot pass a credit check successfully. However, even if you can if your minimum yearly income is deemed insufficient a guarantor may still be requested.
Company referencing will be conducted only in cases where the tenant is a company, for example, you are renting a building or an office space.
Negotiating and Agreeing to Tenancy Agreement
This is a single charge of approximately £210, which is taken for the documents that the agency has to draft. The tenants and landlord will be charged for this.
Unfurnished inventory check
A single charge for the agency that is taken for them coming and writing an unfurnished property and all of its characteristics, what colour the walls are what is the condition of the floor and carpets. When you are ending your tenancy the agency will come and check if everything in the property is in the same condition as it was when they initially made the report, if they are any inconsistencies a part of your deposit will be withheld.
Furnished inventory check
A furnished inventory check is very similar to the unfurnished inventory check, however, in this instance, it refers to a one-time charge that describes what kind of furniture there is in the property and what its condition is. You are expected to preserve the condition of the furniture and return it in the same conditions as it was in when you are ending your tenancy.
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Negotiating and agreeing on renewal or extension to your tenancy
This is a single charge that you will pay every time you are renegotiating or extending your tenancy agreement. For example, if your tenancy contract is valid for one year you will need to pay this tax every year, in other words, every time you are renewing your tenancy.
There are other charges you will have to cover when you are renting a property through an agency.
Deposit- Before you move in you will have to pay a month's rent and at least a 4-6 weeks deposit. In some cases, agencies may require a larger deposit to be covered. The security deposit is held by the agency or landlord and when you are moving out and all the checks that have been conducted will be returned.
A deposit for pets
Some agencies will require an additional deposit for pets.
An amendment fee can be applied in cases where the landlord or the tenant have decided to alter the original contract before the end date of the contract. This can happen due to a change in the financial situation of the tenant if the tenant wants to end their tenancy early. Of course, you will be charged by the agency for this.
Check out fee
Some landlords will require that a third company be hired to conduct the final inspection of the property, to detail the items in the property before it is agreed to be let. When this happens you will be responsible for the charge when you are ending your tenancy when the same company comes to conduct the final inspection at the end of your tenancy. This charge is covered by both the landlord and the tenant.
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What happens after you take over the property?
Your landlord or the agency will regularly plan visits to their property. They will want to make sure that the property will be kept in good condition and that that there are no issues related to the general condition of the property.
What other monthly bills you will have to cover?
If you are renting a room usually it has bills included. If you are renting a whole house or flat you will have to cover all utility bills separately from the rent. Zoopla, for example, is useful because it not only lists the rent you will be required to cover but also approximately the monthly utility bills you will need to pay. If your monthly rent comes to £850 you will also have to cover the following expenses:
Home insurance - not often, however, some landlords request that you cover the insurance.
Energy - energy refers to gas and electricity, those are dependent on your specific consumption, however, you will have to pay for the electricity and gas bills.
Council tax is self-explanatory, however, do you know what council tax covers? Council tax covers waste recycling, street cleaning, garbage disposal, salary for police and the fire department, road repair. The council tax is an individual sum for every property and depends on the property and how many people will be occupying it. You can check exactly how much will the council tax for a given property comes by visiting this website
Dependent on your specific consumption.
The sum for rent that is covered for the property for each month.
And of course, your monthly total will be calculated based on exactly how much you will be paying for the property with all bills included. Do not forget that you may have other charges as well, internet, phone, TV licence.
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How to find a room or home without going through an agency.
Most of us will want to avoid renting through an agency whenever possible. Be it because you simply do not wish to further complicate the process with the additional paperwork or simply because you cannot do so a lot of us will want to avoid dealing with estate agencies when we can. We will present several options you can try to avoid renting through an agency.
Spareroom is probably the most popular site out there for renting rooms. Simply type in your region and you will see a lot of different properties to choose from. Despite, as the name would suggest, targeting specifically rooms you will be able to find a lot of whole properties and studio flats that are listed. Just check the website every day and you will probably be able to find what you are looking for.
There are a few options you will see as soon as you choose a room or property. If, for example, you are looking at a home for £250 per week and the ad states that it includes electricity, water and heating then that means that you will not have to cover those expenses additionally as they are included in the rent. Most of the spare room listings include all or some of the utilities. If you find a property you like simply contact the landlord over the phone or email and inquire.
Openrent is another very popular site for private rentals. Have a look at the listings and inquire. The site is somewhat specific as their process is not that straightforward, however, there are plenty of choices when it comes to properties. Be careful, however, there are agency listings on that site as well as private ones, you will be able to tell the difference once you get a feel for how the site functions.
Renting through an agency does offer some sort of protection and security for your payments. If you are going for a private rental never give money without a contract and request a viewing before you rent a property. Sign a binding legal contract and only make payments with a bank transfer. Always request that your deposit has a Tenancy Protection agreement. You can always check if your deposit is protected with an agency online here.