Renting a Central London property is a great way to establish a base in one of the world’s most exciting capital cities and with the right financial planning, it can be a very rewarding experience.
The set up costs to rent a property are often cheaper than taking out a mortgage. For starters, there isn’t the same hefty deposit to pay. When buying a property, usually a deposit of 25% of a home’s value is needed to secure the best mortgage rates – which would be an astonishing £138,050 using today’s average price of a London property, according to Rightmove.
There are fees and costs associated with renting; here at Residential Land we believe in a very transparent and open approach to what we expect our tenants to pay. We also want to make sure every tenant is aware of the financial costs of running a home, so they are comfortable throughout their tenancy.
We’ve created a quick guide to the most important financial considerations tenants should be mindful of when renting a Central London property:-
- How much can you afford in rent each month? This is probably the most important question. Government figures suggest 35% of take home pay is what most people can afford to devote to monthly rental payments, but this could be higher or lower depending on other outgoings and financial commitments, the type of property that is being rented and in what location.
- Have you got a guarantor? Some tenants – especially younger people who haven’t been able to build up a lengthy employment history or credit record – may be asked to provide a rental guarantor who would pay the rent if the tenant wasn’t able to. A guarantor usually needs to be a UK homeowner with steady long-term employment and a good salary and/or someone with a good credit score.
- Budget for a security deposit. As you will be living in a property owned by someone else, it is usual for tenants to pay a security deposit of between one month and six weeks worth of rent before the tenancy starts. Residential Land is proud to hold each tenant’s deposit with MyDeposits, which is an insurance-based deposit scheme offering full cover to all deposits taken. Your deposit will be returned within 14 days from the end of the tenancy.
- Budget to pay an upfront payment. Your security deposit will need to be paid upfront to cover the initial cost, as well as a month’s rent in advance which will continue throughout the term of the tenancy. It is worth bearing in mind that your last payment of rent will be a month before the date your tenancy ends.
- Budget for administration fees. Residential Land prides itself on having some of the lowest – if not the lowest – administration fees in London at just £50. It’s one of the brilliant upsides of dealing direct with a landlord. By renting through Residential Land, you’ll cut out inflated charges levied by High Street letting agents. As a large landlord we firmly believe in keeping administration fees to a minimum, making renting an affordable start to your residency in London.
- Ask about extra charges. Check with your landlord to see if you are expected to pay anything towards the heating and water, especially in large blocks of flats, as well as a fee for using a car parking space or garden.
- Budget for the ‘running’ of a home. Living in a rented property is not like living in a hotel. You’ll be expected to carry out and pay for essential jobs and DIY tasks, such as changing a lightbulb, replacing a fuse and unblocking a sink. It’s also worth checking if a property is being offered on a ‘furnished’ or ‘unfurnished’ basis. If it’s empty, you’ll need to buy furniture.
- Don’t forget your bills – while some properties to rent in Central London will be marketed as ‘bills included’, the majority are not. Usually the tenant pays for the council tax, all utility bills (including broadband), a television licence and contents insurance.
If there is any aspect of budgeting you’re unclear of, Residential Land would be pleased to guide you through the process. Contact us today for rental advice and a wide selection of houses and flats to rent in Central London.