Back in 2016, 59% of 1,000 renters told us that they didn’t think they’d ever own a home – a state of affairs not unique to the people we spoke to. Indeed, across the country, homeownership is something that many either don’t want or can’t realistically achieve any time soon, if at all.
What we’re dealing with is Generation Rent and with its ranks only expected to swell in the future, it’s important that renters are empowered to find the home of their dreams.
To offer a bit of a helping hand, we’ve compiled a step-by-step guide to get people through the process.
Step 1: Prepare your finances
It’s a bit of a misconception that you don’t have to get your money in order to rent in the same way as you would to buy a home. However, the process is surprisingly similar from a financial perspective. Here’s what you need to consider.
- Rent – how much can you afford each month and still be able to pay your bills and cover the cost of living? You should set yourself a monthly rental budget and a budget for your bills, including council tax, to help you narrow your search and avoid a situation where you’re constantly stretched each month. Remember that rent can often be more expensive than a mortgage, so you need to make sure you can afford everything.
- Deposit – it’s very rare to find a rental property where you don’t have to put a deposit down. While rental deposits are smaller than house deposits, they can still disrupt you financially if you’re not prepared for them. Research from the Deposit Protection Scheme found that in the last 3 months of 2016, the average rental deposit in the UK was £970.18, rising to £1,831.14 in London. If you know roughly when you want to move into a rental property, give yourself time to start saving up your deposit before you have to sign on the dotted line.
- Credit check – landlords or letting agents will run a credit check when you apply to rent a property. This allows them to assess your ability to make rental payments. Make sure your credit report is in order before you apply by checking it at Noddle, as well as at the other two credit reference agencies (Experian and Equifax). Errors in the information and/or a low score could affect your ability to secure your property, so it pays to tackle any problems well in advance of applying to rent.
Step 2: Decide what you want from a property
Make a list of the things your property must have before you start your search to make the process easier. Things to consider include:-
- Location – what area do you want to live in? Do you need to be close to any amenities or transport links? Are there any good schools in the area? etc
- Property type – house, flat, shared or single occupancy, outdoor space, number of bedrooms, parking.
- Tenancy – rolling contract or fixed term? How long do you want a fixed term for? Bills included or not included? Furnished or unfurnished?
- Permissions – can you have pets? Are you allowed to decorate?
- Utilities – eco property? Internet and TV?
Step 3: Start the search
Now you know what you can afford, where you want to live and what you’re looking for in a home, you can start your search.
If you’re searching yourself online, set your parameters as close to your criteria as you can, adding keywords if possible. If you’re using an estate agent, give them as much information as possible about what you want, but be clear what’s a ‘non-negotiable’ and what you’re willing to give up.
Try to book in a couple of viewings to give yourself a flavour of what’s about and to give yourself a benchmark to compare properties against. If you know you’ve seen a lot of what’s out there, you’re likely to be more confident that you’ve found the right place when you do decide on somewhere. Going to see a home in person also gives you a better feel for the property and the area. After all, something might look great in pictures but not in real life or vice versa.
Top tip: Don’t forget to look at EPC ratings and council tax bands, as these will affect whether or not you can afford the property. It’s also a good idea to do a quick search to see if there are any planned building works or other disruptions in the area.
Step 4: Securing your property
Once you’ve found the home you want, you might be asked to put down a reservation fee, which will likely be deducted from the deposit you pay if you eventually move into the property. However, each landlord or letting agency might operate differently, so it’s worth finding out how it works beforehand.
You may find that there are other people also interested in the property. When this happens, you might be told you’re unsuccessful because someone got there first or you might enter into a bit of a bidding war. This is when interested parties put in offers for rent and the landlord accepts the highest, subject to credit checks.
Step 5: Checks
Once you’ve got the green light to proceed, you’ll undergo a credit check and a reference check. As mentioned above, this is so landlords and/or letting agents can see how likely it is that you’ll be able to make rental payments and that you’ll be a good tenant.
You will also have to prove your right to rent in the UK, which is part of the Immigration Act. You can find a comprehensive list of accepted documents at Easy Property.
Step six: Signing on the dotted line
If you pass all the relevant checks, you’ll be asked to pay the deposit. Once this has gone through, your property is secured and you will be presented with a tenancy agreement.
The tenancy agreement is the legally binding contract that lays down terms of your rental and is signed by you and the landlord. It’s designed to protect tenants and landlords but you still need to check to make sure you’re comfortable with everything in it, as there may be terms you weren’t aware of.
Your tenancy agreement will also include the date on which your rental contract starts, which will be the date your rent is due. If you want to change this date, you need to let all the relevant parties know before you sign the agreement.
Life in your new rental property
Once you’ve moved in, you can start to enjoy life in your new home. However, don’t forget to have your landlord’s contact details on hand in case something goes wrong and be sure to follow the terms you agreed to in the tenancy agreement. If you’re unsure whether or not you can do something to the property, it’s always best to ask.