Listen to Navigating Tenancy Finances
Listen/Read time 5m 34s
Embarking on a tenancy journey comes with financial responsibilities that go beyond monthly rent payments. In this guide, we’ll navigate the intricate landscape of tenancy finances, shedding light on fees, deposits, and the often-dreaded rent increases. Understanding these aspects is crucial for a smooth and financially sound tenancy experience.
In compliance with current regulations, landlords and letting agents are prohibited from charging fees to tenants. Instead, they may request a holding deposit, which is capped at the equivalent of one week’s rent. This holding deposit serves as a commitment from the tenant and is later applied towards the first month’s rent, if they successfully pass referencing checks. However, it’s crucial to note that if tenants do not meet the referencing criteria, the holding deposit is usually withheld by the landlord or letting agent.
Security deposits are an integral part of your tenancy, providing landlords with a safety net and tenants with a sense of security. Security deposits are capped at the equivalent of 5 week’s rent. Although many landlords and letting agencies ask for less.
Your security deposit must be held with a government approved deposit security scheme. At the end of your tenancy your security deposit is returned to you in full, less any repairs or cleaning that is needed. If you do not agree with any of the deductions your landlord or letting agency make, you can complain to them in the first instance. Failing that, the security deposit scheme operates a mediation service.
It should go without saying that as a tenant you will have rent to pay. Usually rent is paid monthly, in advance. As a regular payment, it is advisable to set up a standing order so that the rent is paid on a particular date each month. If you can agree with your landlord or letting agent for payment to be made soon after you are paid, it will make managing your money easier.
Everyone faces unexpected expenses now and again. If you have any difficulty paying your rent, you must contact your landlord/letting agent as soon as possible. They want to keep good tenants and if you can propose a way to catch up quickly they are likely to accept it. Regular late payment or non-payment could mean that you lose your home.
Rent increases are an inevitable aspect of tenancy, but understanding your rights and negotiating effectively can make a significant difference.
Your tenancy agreement may include a rent review clause. It is important to read your tenancy agreement carefully and note when the rent review will take, how much it is likely to increase and how much notice you will receive. You may be given the option to sign another fixed-term tenancy for six or 12 months at the new rental price.
Landlords are only entitled to increase your rent once in every 52 weeks. They may not increase your rent during any fixed-term tenancy agreements.
If you are on a periodic tenancy the landlord or letting agency will need to use a Section 13 ‘Landlord’s notice proposing a new rent’ form to increase the rent, giving at least one month’s notice.
One of the benefits of living in rented accommodation is that many of the maintenance costs lie with the landlord. However, as a tenant you still have responsibility to repair any damage caused by you. You also have responsibility for consumables like lightbulbs, batteries and filters. You should keep this in mind and set aside money in your budget for this.
A full list of maintenance responsibilities is available on our Tenant Information Pack page.
Some properties, usually shared houses, include utilities within the rent. Gas, electricity, water, sewage, council tax, TV license and wifi may be covered. It is up to you to read your tenancy agreement and pay for any utilities that are not included. Your tenancy finances must allow for utilities payments. For any utilities that you pay for, you are entitled to change suppliers, but you must inform your landlord/letting agent that you are doing so.
Navigating tenancy finances is a skill every tenant should master. By understanding holding deposits, safeguarding your deposit, negotiating rent increases, and anticipating your maintenance costs, you empower yourself to navigate your tenancy with confidence and financial prudence.
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