When you start renting, the initial payments can leave your bank account looking decidedly unhealthy.
But a ban on agency fees has reduced the damage that could be inflicted on your savings.
In fact, there are several tenant fees that have been banned lately, which will all help make moving rental home a little easier.
And although you'll have to stump up for a security deposit, you can have peace of mind that it has to be held in a protection scheme.
Here's our handy outline of the costs you should and shouldn’t expect to pay when you find a new rental home.
What will you need to pay?
You'll typically have to make some payments before you actually move in.
Holding deposit
A holding deposit may be required to reserve a property. It’s capped at one week’s rent, can only be held for 14 days and is refundable.
Security deposit
You'll also have to pay a refundable security deposit to your landlord (or letting agent). It acts as protection against any breaches of the tenancy agreement and is capped at five weeks' rent. However, if the annual rent is more than £50,000, it is capped at six weeks' rent.
Rent in advance
In most instances, you'll also need at least one month’s rent sitting in your landlord’s bank account.
There’s no limit on how much advance rent a landlord can ask for. If they request more and you’re not comfortable with that, ask them to reconsider.
Looking for a new rental home?
Search for a new rental home by location, price, number of bedrooms and more.
Which fees have been banned?
It's illegal for landlords (and lettings agents) to charge tenants for:
administration, such as drawing up the contract and creating copies
reference checks, with people whose details you’ve provided to verify you’ll be a good tenant
credit checks with agencies such as Equifax and Experian to make sure you’re not in serious debt
tenancy renewals, if you stay on in the property at the end of your contract
checking-out, such as the cost of inspecting the property when you leave.
These fees were banned for new tenancies starting from June 2019.
But from June 2020, these rules apply regardless of when your tenancy started. This means that you cannot be charged for any of these fees - no matter when your agreement was sealed.
These rules apply in England and Wales only. Fees are also banned in Scotland. In Northern Ireland, agents cannot charge fees but landlords can.
What are deposit protection schemes all about?
Some costs, such as repairs, might be deducted from your deposit.
By law, all assured shorthold tenancy deposits must be held in one of the government-backed deposit protection schemes. They are designed to keep your money safe until the end of your tenancy.
There are three schemes in England and Wales and separate ones serving Scotland and Northern Ireland. Your landlord has 30 days after you’ve paid the deposit to prove it’s been put into a protection scheme.
They work in one of two ways: either the scheme holds the deposit for free (known as custodial), or you, the agent or the landlord holds it and pays the scheme a small fee to protect it (known as insured).
Either way, the scheme will resolve any disputes at the end of the contract and both parties must agree on the amount due back before it is repaid.
Guide to deposit protection schemes