Everyone knows that saving for a deposit to get onto the property ladder is an insurmountable challenge for many, but private renters are also stung by having to fork out huge amounts of cash at the outset.
Would-be renters have a number of costs to take into account before they can think about getting the keys, including up to two months’ rent as a deposit, the first month’s rent in advance, as well as letting fees imposed by the agent.
With UK rents now averaging around £1,196, according to research from Landbay, this means that some tenants could be forced to stump up as much as £3,588 in advance to secure the property, plus letting agency fees of an average £200-300 per tenant.
This is at the top end of the scale – according to the Tenancy Deposit Scheme, 47% of deposits were one month’s rent, rather than the maximum of two. Obviously, this deposit is returned at the end of the tenancy, either in full or with deductions for any damage caused, and the money can then be put towards the next rental home deposit, but the agency fees are normally unavoidable.
Better late than never
Many renters had got their hopes up that the government’s ban on these letting fees would be coming into play this year, but the newly named Ministry of Housing, Communities and Local Government, led by Sajid Javid, has confirmed that the rule change has been pushed back to 2019.
A spokesman said: “This government is determined to make sure the housing market works for everyone. That’s why we’re delivering on our promise to ban tenant fees, alongside other measures, to make renting fairer and increase protection for people in the private rented sector.
“We announced our Tenant Fees Bill, which has been first published in draft so it can be fully scrutinised by everyone affected. As confirmed in our written evidence to the Communities and Local Government Select Committee, we expect the ban to come into force after spring 2019.”
A government consultation revealed that nine out of 10 tenants supported the move, with 70% saying that letting fees affected their ability to move into a new rented property – proof that the changes, when they do come in, will be a massive leg-up to many renters struggling to cover their costs.