Before you search for a home to rent, let's get to grips with the costs of renting a home.
We'll factor in rental rates, the costs of moving and what you'll spend once you're in, on things like bills and furniture.
It might sound like a lot to think about, but doing this at the start of your search will help you narrow down your options and find a rental home faster.
So let's break it down. Open your banking app, grab your payslips and we'll go through the costs together.
Here are the main costs of renting a home and how to work out what you can afford.
1. Rental rate
Rent will be your biggest housing cost each month. So working out what you can afford to pay in rent will guide your whole search.
The average rent in the UK is now around £1,221 a month. But don’t panic if you can’t afford that.
There are lots of places around the UK where you can rent a home for between £500 and £800 a month. It varies across the country depending on the location, size and type of a rental home.
A general guide is to put between 30-45% of your monthly income towards rent.
So if you take home £1,500 a month, you might want to allocate between £500 and £675 to rent.
Looking for a new rental home?
Search for a new rental home by location, price, number of bedrooms and more.
Be aware of the difference between ‘per week’ and ‘per month’ rental rates
At Zoopla, we show both the monthly and the weekly rate on our rental listings.
But some websites and letting agents will only show one or the other. It's easy to assume the monthly rate is just the weekly amount multiplied by 4, but that's not quite right.
If you see a weekly rate, multiply the figure by 52 to get the annual rental cost. Then divide this by 12 to get the monthly rental rate.
So if the weekly rate is £250, the annual rate is £13,000. And the monthly rental rate is £1,083.
It might not seem like a huge difference, but it adds up to a lot over the course of a year.
2. Security deposit
A rental security deposit is usually five weeks’ rent. Try to plan ahead and save enough to cover it.
It's never ideal to borrow money or use a loan to pay a deposit, as you may end up paying a whole load of interest.
If you already rent a home, you might be expecting your deposit back from your previous place. Your landlord must return your deposit within 10 days of you both agreeing how much you'll get back.
Most landlords accept bank transfer, debit card or cheque. Some will accept cash, but ask for a receipt in case you need proof of how much you paid in the future.
If you cause any damage or fall behind with rent, the landlord can use your deposit to cover it. But if all goes well, you’ll get your whole deposit back when you move out.
The landlord or letting agent legally has to put your deposit in a government protection scheme.
Find out more about deposits and protection schemes.
3. Holding deposit
As well as the security deposit, you may need to pay a holding deposit and rent in advance.
A holding deposit secures the rental home for you while the agent checks your references. It’s usually one week’s rent.
Once the checks are done, you might get the holding deposit back. Or the amount can be taken off the security deposit or upfront rent.
4. Rent in advance
You pay rent upfront because your rent covers the upcoming month, not the previous one.
Most landlords ask for one month’s rent before you move in. But it can be more if you have a low credit score.
Before you sign or pay anything, read your rental contract carefully.
It’ll tell you exactly what money you need to pay before you move in. It should also have details of the deposit protection scheme. If anything’s missing, ask the agent or landlord to put it in writing before you go ahead.
How to understand your rental contract
5. Bills and utilities
As a tenant, you will need to pay:
Council Tax
internet and phone bills
TV licence
contents insurance
You might also need to pay for gas, electricity and water. But some landlords wrap this up in the rent.
The complete guide to the bills you pay as a tenant
When you start viewing properties, have a quick chat to existing tenants about their bills. Ask them which providers they are with and what they pay each month for each bill.
This is a great way to understand exactly what you can expect to pay in bills when you move in.
Keep in mind that some rental homes have extra service charges to pay for things like gardening or cleaning communal areas.
Bills and service charges you're responsible for should be explained in the property listing. But double check with the letting agent so you don’t get any surprises.
15 questions to ask at a rental viewing
6. Furniture
You can get rental homes that are fully furnished, partly furnished or unfurnished.
A landlord might charge a little more for a furnished place, but it usually works out cheaper than kitting it out yourself.
So if you want to save money and have less hassle, stick with searching for furnished rentals.
An unfurnished home can give you a chance to put your own stamp on your home. It’s also a good way to start building up your own things if you want to buy a home in the future.
Go for second-hand furniture to keep costs down and be kind to the environment. Gumtree and eBay are good places to start, or ask friends and family if they have any spare furniture.
Search unfurnished rental homes
A part-furnished home can be a good meet in the middle. The main items like a sofa, bed and dining table will already be there for you, but there's plenty of room to make it feel like home.
Search part furnished rental homes
Work furniture costs into your overall house budget from the start. Budget for the essential items before you move in and try to spread non-essential purchases out over a few months.
The pros and cons of furnished and unfurnished rental homes
Are there any other costs to think about?
You'll be responsible for any damage you've caused. The cost has to be reasonable and you only have to pay once you've seen written evidence of how the bill was calculated.
If you want to make changes to the contract, such as if a new housemate moves in mid-tenancy, you may have to pay up to £50.
If you lose your keys, you might have to pay to get new ones cut.
Keep in mind that your rental contract might say you can be charged interest on late rental payments.
You can only be charged interest if you are two weeks behind, and it can be no more than 3% above the Bank Rate per day.
Ways to cope with the rising cost of living
How to prove you can afford to live in a rental home
Before you can move into a property, you’ll need to show the landlord or letting agent that you can afford the rent and that you'll be reliable in paying it.
The landlord or letting agent will ask you for proof of character. This will be in the form of references from your previous landlord and current employer.
The references you'll need to rent a home
They’ll also ask you to show proof of income and address, using payslips and bills.
They may want to run a credit check on you with a credit reference agency.
You can use sites like Equifax, Experian or TransUnion to check your score. Make payments on time, close down old accounts and register on the electoral role to improve it.
How to improve your credit score
The check will give them information about your previous record on paying back debts and whether you have any County Court Judgements (CCJs) against you.
These checks usually go through without a glitch, so they’re nothing to worry about. It just helps to be organised so you can move into your new home quickly.
Only once a landlord or letting agent is happy with all the checks and references, you can sign the contract and get ready to move in.