TheTenant's Survival Guide
Basic things to understand before you start renting
How renting works
Tenants need some basic explanations about the contracts on offer and other associated but important issues. Most are touched on in Lesson 1 to get you started, then delved into more deeply in the relevant lessons. Just keep reading. This lesson will give you a pretty good idea of how renting/letting works long before you start signing contracts that you can’t get out of.
For most tenants, their first step is to find out the going rate for properties that match their needs, in other words, how much what they want will actually cost them. Savvy tenants will check the papers, research online and visit agents to get a feel for how much money will be involved in what they’re looking to rent. Landlords and agencies are, since the introduction of the Housing Acts 1988, allowed to effectively charge the local ‘going rate’ for all assured shorthold tenancies. There’s therefore very little that most tenants can do to control costs but to shop carefully.
Assured shorthold tenancies operate on ‘market rents’
For more than a decade, control of rents has been a fairly hands off affair for officialdom. How much you’re being asked to pay will usually be a combination of the local conditions, the state of the property and, of course, the price of local property versus how much you can afford to pay.
This is known as a ‘market rent’ (as opposed to the old strictly controlled ‘fair rents’ that – believe it or not – still apply to very old tenancies). Most of us should welcome this. ‘Fair rents’ contributed to the sharp decline in property to rent, whereas ‘market rents’ have encouraged a growth in supply, generating far more choice and availability. This is good news for tenants, but it has set costs spiralling.
Rent assessment committees
There are still some very limited facilities, which tenants can use, but only in situations where they really believe that the rent they are being charged is basically outrageous – way beyond other similar units in their area. The Rent Assessment Committee (RAC) exists to exert some limited influence on totally excessive rent levels; but tenants should be very wary about making an application. Rent levels are often raised by this committee as well as reduced.
If you genuinely feel that the rent you are being charged is totally out of line with others in the same area, you can obtain details from your Citizens’ Advice Bureau about where your local RAC is. Check thoroughly before you make an application. All RACs keep a public record of their decisions, which you can examine. If the difference is marginal they are unlikely to intervene, and you are likely to have irritated your landlord for no good reason. Don’t expect a lease to run long with an agitated landlord.
Far better than taking on a property which you think is unreasonably priced, or worse still, one that you are going to have difficulty managing to pay for, is to look carefully at what is on offer in the area you need to live in, and rent something which you can afford.
Understanding your ‘fixed term’
I know it sounds like boring technical stuff, but every modern tenant needs to really understand the principal of fixed terms. This is the original duration of your lease written onto your assured shorthold lease. This fixed term is vitally important and is explained in more detail in Lesson 8.
However, understand this right from the outset. Assured shorthold tenancies are, by their design, temporary. Tenants have no automatic or legal rights to stay beyond that original fixed term.
Of course, that doesn’t mean that all tenancies end on the dot of their fixed term by any stretch. Many run on for years, with or without much alteration in terms. Nor does it mean that a landlord/agent can simply put you onto the street on the day the fixed term expires – there are legal processes that need to be used to evict any assured shorthold tenant. However it does mean that, once these fixed terms come to an end, any landlord has a legal right to insist on having their property vacated (this legal process is explained in Lesson 12). Control of how long you remain reverts absolutely to your landlord once your fixed term ends and that decision will almost always depend on your conduct as a tenant. However, they don’t need any legal reason whatever to ask you to leave after that.
During your initial fixed term, you do enjoy a degree of security – in other words, you’d have to be breaching a significant element(s) of your lease – like not paying rent or causing damage – before any court would agree to terminate your contract during the initial, relatively secure, fixed term. In return for this limited security, you become liable for rent during the entire fixed term. The longer the fixed term, the longer your security and your liability for the rent (with some safeguards, explained later).
Where to start your searching
www.whatever is an excellent place to search through, but online letting has not yet really taken off. Although it ’s an invaluable research tool, most private landlords (who remain the majority providers) still stick with newspaper advertisements. This means that online alone can actually distort your view to the only set of suppliers who always use it – i.e. the letting agents, whose rents are often higher because they incorporate fees. Make sure you never rely on only one perspective in such a diverse marketplace. Even if you’re searching from some distant town (or country) make sure that you explore all the options.
- & Students should always explore their own university’s accommodation service where decent property is often available. Check whether or not these units have been checked for safety – some universities simply provide lists, others carry out extensive safety checks and accredit property.
- Other tenants may wish to try contacting the local authority in the area they’re looking to rent in – many grew so tired of substandard accommodation that they drew up lists of accredited properties that comply with all safety requirements and have responsible landlords. Quite a few now have extensive lists of recommended properties that rarely come onto the open market via agents or the newspapers.
- Both the above options are a great place to start for students and the second is an excellent first choice for all tenants looking for keenly priced units.
- Tenants searching for property whose first consideration is not cost but location could do worse than explore a local relocation service – however once found, the terms/conditions would not be ‘guaranteed’ and users still need to read the full guide to avoid pitfalls.
The lettings agencies
Most towns are now awash with lettings agencies. These companies are keenly commercial operations which exist to make profits, not to be your friends, no matter how much of a welcome mat they put out for you. They are employed by landlords, not tenants – renting through an agency does not make you their customer, they already have their client – landlords. A quick walk down any high street, or a brief scan through any local paper will show you just how many there are. Every one of them has property on their books and is actively looking to get tenants into contracts. But beware: all agents have many additional up front fees. Added up, they can come as quite a shock to the unwary.
Agents are forbidden by law from charging tenants for simply providing lists of available accommodation. Stories are emerging however that some London agencies are trying to charge a fee to show you a property. If someone asks you for seventy-five pounds to even view a flat . . . do yourself a favour, find another agency.
Finding accommodation through agents can have some unexpectedly high add-on costs and I take a look at some likely ones in Lesson 5. These can add up to significant sums of money simply to get to the contract stage so make sure that you check the agency lesson carefully – especially if you’re on a tight budget.
Like agents, landlords exist to make profits. They are often also landlords who prefer more direct relationships with their lettings – especially over tenant selection. However, because their costs are reduced by not paying agency fees, many offer slightly lower rents. In addition, few make charges for basic tenancy set-up services. They usually look on the inventory processes at both ends of the contract as part and parcel of setting up a well organised tenancy. Nor do many independents charge lease signing fees, extension fees or any of the other variations dreamed up by agencies. Many don’t charge check in, check out fees or inventory costs either.
Checking your options
You pays your money and you takes your choice in the rental game. So always at least examine your options beyond the easy high street strategy. If ever a market thrived on choice it ’s the huge lettings market. Checking out your options can save you a great deal of money over the lifetime of a rental contract.
A word about the paperwork
All sensible private landlords/agents do require their younger tenants (students and the under 25s usually) to provide a Parental Guarantor. Effectively what this means is that all the responsibilities like rent, bills and especially damage are underwritten or ‘guaranteed’ by someone older who is presumed to be more responsible than the young tenant (and to have more cash!).
A responsible landlord, having just refurbished a whole house, rented it at 8 p.m. to three young people. When he returned the next morning, as arranged, to do one final job in the new kitchen, he found that the contents of the coffee machine had been tipped into the centre of the new lounge carpet, and five cigarette ends had been stubbed out and left in the centre of the coffee. They had been in place less than 12 hours and had caused over £400 worth of damage!
So, landlords do need these guarantees. Sometimes people moving out of home for the first time simply don’t get to grips with the realities of costs and care for property that all tenants contractually agree to when signing leases, or other rather basic bits of knowledge either.
A young, unemployed man took a flat. His mother clearly wanted him to leave home, and paid the deposit; she also happily signed a parental guarantor form for the agent. Her son moved in, and within a week the two tenants downstairs contacted the agent. Hot purple water was pouring through their bedroom ceiling. An emergency plumber was sent to investigate. The young home leaver had acquired an automatic washing machine, and had fitted it himself. The plumber looked, and asked where the waste pipe had been fitted
‘What waste pipe?’ he replied innocently.
‘Perhaps the one still fitted snugly with plastic ties to the base of the machine?’ the plumber suggested.
Gallons of hot soapy water had run through the building that week. The agent decided to visit and have firm words with the tenant. When the lad opened the door, a big footed Rottweiler puppy jumped up to greet him. Another impulse purchase? When contacted the mother simply had no idea of the implication of the guarantee she had so recently signed, and would be held to by a rightly efficient agent.
‘But surely you can claim on the insurance?’ was her response. A full repair account was sent to the mother.
Tenants’ application procedure
Many landlords/agents will also want to instigate a tenants’ application procedure of some sort – another form where tenants are legally obliged to reveal information like former addresses, their National Insurance Number (or passport number) and a variety of other verifying personal details. They will almost always require authorisation for credit checks. This kind of paperwork is essential for landlords (or their agents). Make sure you fill in details truthfully. These documents are fast becoming adopted by most landlords and agents.
Since 1997 one of the grounds upon which tenants can be asked to leave (even during the relatively safe fixed term) is Ground 17, and the period of notice of your landlord’s intention to seek possession in this case can be as little as two weeks (see Lesson 11 for further details on grounds for possession).
Ground 17 allows landlords to act if they were persuaded or induced to grant the tenancy as a result of a false statement, knowingly made by the tenant, or someone acting at the tenant’s instigation. This was a very significant addition to the rights of possession your landlord had before 1997, and a necessary one. Tenants who now claim to be employed when they are not, for example, could be affected. So too could tenants who pretend to be older than they in fact are, where landlords have age restrictions. Students have often failed to admit that they are students because many landlords do indeed avoid them. Application forms are a protection for landlords and agents against any such false statement.
This Ground enables landlords who have been told untruths to use that as a legal reason for the prompt return of their property. Tenancy application forms are a useful way therefore of making sure that landlords and agencies have written proof of the tenants’ claims. Prospective tenants would be well advised to remember this when filling them in.
Other types of guarantee
Sometimes tenants have circumstances which require specialist guarantees. An excellent example of this is for the tenant who wants to move in, say, with the family dog. Most leases specifically exclude pets, but if you need a home with your dog, and you discuss it in advance, many agents and landlords will agree. They do however normally expect you to provide additional levels of deposit against damage, and often ask you to sign a guarantee that you will replace to their satisfaction any items (including garden lawns) that have been damaged. They also usually demand additional end-of-lease cleaning.
But the majority, i.e. honest tenants, shouldn’t fear the paperwork. It ’s part and parcel of getting off on the right foot, of giving your landlord the confidence to let you rent what is a very expensive asset for a tiny part of its value each month. It ’s healthy having exactly what both parties agreed set out in writing, and it protects both the landlord and the tenant. Landlords/agents who are organised enough to have procedures like this are also the ones most likely to respond to genuine problems like repairs because they’re set up to make their contracts run smoothly, hence protecting their own vital income stream.
Beware the absence of paperwork
Avoid like the plague the landlord willing to offer some ‘back of the envelope’ type of tenancy – the last thing a modern tenant needs is a landlord who skirts round the legalities over such huge financial obligations. Organised landlords know what they need. They’re the ones who aren’t interested in scams, in trying to charge for things that have never been discussed, let alone agreed to by tenants. Okay, in reality an assured shorthold tenancy can be legally set up without a shred of paperwork – but that ’s not what you want. Organisation proves a mindset of responsibility and with rents this high, who wants a disorganised landlord when the boiler breaks down? Or all those fights over what the conditions were when deposits need returning? Paperwork protects tenants and landlords. Don’t be tempted to skirt round them in such costly contracts. It ’s a recipe for future trouble.
A word about inventory costs
Let’s be clear here, whether you’re renting from a private landlord or via an agent, inventories are absolutely essential to protect both tenants and landlords. You need an inventory – a freshly prepared one that accurately reflects the genuine condition of the property.
Inventories are closely tied into the deposit structure – so they really do matter and are explained more fully in Lesson 4.
Tenants agreeing to take on a property that doesn’t come with a brand new, up-to-date inventory, which they’ve checked through, agreed and signed as an accurate record of condition, are asking for trouble when they move out. Consider yourselves warned. Accommodation without paperwork is a sure sign of careless management (landlord or agent) – and that’s the last thing you want to be paying a small fortune for.
Inventories are one of the most contentious areas of ‘the business’ and so closely tied into the deposit structure that no sensible tenant can afford to be blase´ about them. Read up on deposit charges and inventories – not knowing what you’re legally liable for can be a very costly bit of ignorance.
Examining the options realistically
All these various charges and services need to be considered when working out what you can and cannot afford. Tenants renting relatively lower priced units very often find themselves renting via independent landlords who simply don’t generate the profit levels needed to engage agents – or choose not to pay them because they know perfectly well how to run a tenancy. Also bear in mind that agency fees for many other services can be very hefty. Not only do they levy high fees from the landlord for their services, but also their end of lease redecorating, cleaning, and repair services can be very expensive – especially if they have a good sized deposit to work through at the end of a tenancy. (Much of this will thankfully change with the new Tenancy Deposit Scheme – explained later – soon to come on-stream.)
Sometimes properties available to let through agencies can be more expensive than similar properties available direct from private landlords. The landlord’s agency fees have to be incorporated within the rent, and you will be paying them. Agencies usually charge landlords around 15 per cent plus VAT of the rent for management – money that comes from higher rents. For some tenants this is worthwhile, but many others prefer to find their own landlord.
Finding the independent landlord
Check the local classified section or ‘property to let ’ column. Many of the advertisements will have been placed by agents, but they are often required to indicate that they are trade, or to state their company. Some free advertising papers even require anything other than private advertising to be in bold print so that it is very easy to recognise. Rule of thumb. Wherever it ’s glitzy, it ’s an agent.
Look through the smaller adverts and there you’ll find thousands of private landlords who advertise here direct – every single day of the week. Check the price range you are looking for. Rental valuations depend on a number of different factors; the area, the condition and the facilities offered. The valuations will vary, so check over a couple of weeks to get a feel for the price range you are looking for before you start making appointments to view. And again, watch out for charlatans.
Bargains are usually too good to be true. One canny landlord was recently discovered to be showing tenants a rather fancy property at what seemed a very cheap rent. For consideration, he demanded an up front fee for referencing, which came to several hundred pounds for each viewer – and at such a bargain basement price he got a great deal of interest. All applicants were rejected on the grounds of unsatisfactory references – many lost hundreds of pounds each. This case is being investigated by Trading Standards, but illustrates perfectly that there’s always someone with a well worked scam just around the corner. Always beware someone asking for huge upfront sums of your money.
A cautionary word Renting property through well run agencies can have some unrecognised benefits. Some agencies (but by no means a majority yet) are members of trade associations that monitor standards and they should check basic safety provision on furniture, gas safety, etc of anything on their books because they have legal liabilities themselves if they don’t. This doesn’t apply to independent landlords, where tenants need to proactively check basic safety for themselves. And, unfortunately, the worst landlords of all, offering the dangerous property, can’t get taken onto the books of any legitimate agent, meaning they always advertise in the press along with the overwhelming majority of responsible landlords. Be very wary of any property that seems clearly cheaper (or tackier) than its competitors. Safety isn’t something you can afford to be casual about. See Lesson 2 on viewings for advice. Things you need to know
There’s much more information on this topic in a later lesson, but as a rule of thumb, most agents/private landlords will want at least a month’s rent to hold against damages. Many will ask for the equivalent of six weeks’ rent. This should be held for you (and always remains your money) until the end of the tenancy. This is a big topic and one about which you’ll find a whole lesson later in the guide.
All landlords and their agents expect tenants to pay for their accommodation in advance. Usually the required amount is a month (or four weeks’ rent) and rent needs to stay in advance at all times to satisfy your lease.
How is it valued?
The biggest inclusion of all here is location, which can add or subtract huge sums to or from the rent. It ’s a simple fact that there is now property right across the range and to suit all pockets. The less you have to spend, the further you’ll walk to the shops. Know what you are looking for, and where you can afford, because careless mistakes can haunt you in the lettings game.
What’s included in the rent
Rent is just that – unless it specifically provides for inclusions (which should be clearly stated). Rent does not include council tax, water rates or TV licence and it certainly won’t usually include electricity or gas costs.
When trying to work out what seems a reasonable rent, take into account what is being included. And make sure that you learn the shorthand. P/F means part furnished; C/H means central heating; S/C means self contained.
Unfurnished accommodation is for the serious renter and provides nothing but the building, facilities (kitchen/bathroom) and a heating system. It may include carpets. It is expensive to equip and, unless you have a number of personal possessions, this is probably not for you. Unfurnished is also a real rarity – there are historic reasons for this that I won’t bore you with. If renting U/F look for a long initial ‘fixed term’ – it simply isn’t cost effective to move in and out of this type of unit twice a year.
Many, many properties are offered part-furnished (P/F), which usually means carpets, curtains, cooker, fridge. Some landlords and many agents prefer it because there are strict requirements on the safety of supplied beds, sofas, etc in furnished units (which will be detailed later in Lesson 2). Again, it takes a great deal of money to equip these units and the P/F rent can often look attractive because less is being offered. That can make P/F much less cost effective in the long run, whereas fully furnished (F/F) will cost a little more. Always make sure you that are comparing like with like when doing your research.
F/F means fully furnished and should include all furniture, carpets, beds, curtains, etc that you need to live comfortably, but won’t usually include items like crockery, bed linen and small kitchen appliances like kettles and toasters. This is by far the most common type of rental.
It ’s a hugely popular arrangement and the most widely offered because moving in and out is cheap and yet tenants can ‘personalise’ a bit.
If you choose to take a furnished unit, and then want it unfurnished so that you can take your own furniture, it can actually cost you more, because you will have to pay for removal and storage of your landlord’s belongings. Check the cost implications of this before you arrange it.
Rarely, properties come fully furnished and fully equipped (F/F/eqpt) and these should have everything you need (furniture, crockery, and sometimes even linen – everything including the kitchen sink!). Tenants taking fully furnished and equipped accommodation need not only an excellent inventory, they also need to live very carefully. One broken plate, which could have been part of a set, and full replacement of a complete new matching set could quite reasonably be required by the landlord or agent. Any tenant considering taking on a high spec unit where every item is provided should seriously consider engaging an independent inventory service – easily found in any Yellow Pages. Private landlords will usually (but not always!) split the costs with you as this is of shared benefit. You simply have no idea how much hassle two sensible people can create over a single broken wine glass. Get it in writing!
Don’t think that the very rich don’t rent. They do. And landlords offering very high spec units are expected to make very certain that their goods are in order. One wealthy tenant successfully sued a landlord because a wonky leg on the antique dining table resulted in an accident involving the tenant’s own costly china and a ruined dinner party.
What should you pay?
Obviously, the more you are being offered, the higher the rent will be. But don’t try to economise on what you need. It isn’t much of an economy to rent part-furnished and then have to spend a fortune buying beds and sofas. After all, most tenants do not actually own a houseful of furniture. Never take a property without real thought which doesn’t come complete with carpets. Only the very rash would seriously consider carpeting a house or flat on the basis of six months’ guaranteed security.
How the rent can be calculated
Whoever you choose to rent from, watch how the rent is actually calculated. If the property is advertised as a rent ‘pcm’ (per calendar month) you will make 12 monthly payments in any one year. If the rent is weekly, you will make 52 weekly payments in any year. This can actually make quite a considerable difference – many landlords have 13 lots of four weeks in their years!
Check it this way. If you are being quoted a weekly rent, multiply it by 52, then divide that total by 12 to check out the calendar month costs. The rent on what actually sounds cheaper could in fact be quite a fair bit higher, and most experienced landlords and many longstanding agencies do not use pcm rents for this very reason. It ’s the basic retail £1.99 rather than £2.00 strategy. Most agencies on the other hand do prefer pcm rents because it makes their monthly accounting process easier. Plus people who are paid on a pcm basis can sometimes prefer it too.
Rent £100 per week 6 52 = total annual cost £5,200 per year Rent £400 pcm 6 12 = total annual cost £4,800 per year As this very clearly shows, there can be a difference of £400 per year between these rents due to the thirteenth month. Yet to the inexperienced, they can sound broadly the same.
A word about negotiation
Prospective tenants are often advised to negotiate over rent. This can be much easier to say than to do. Most landlords/agents will not even consider price negotiations. Some will. It will depend absolutely on market conditions and how they are affecting supply at the time. Only you can be the judge of that from your basic research. If dozens of two-bed flats within a mile are constantly advertising, it may be worth a shot.
However, in a market where good, or even half decent mid-range property is going fast, the reality is that your attempted negotiations may not be appreciated. Many landlords are actually pretty uncomfortable about attempts at negotiation. They may even take it personally; feel that you are trying to ‘knock down’ a property they think is delightful. Try it by all means, but don’t be especially surprised if you’re shown the door.
One genuine exception to this advice is for the cash-rich tenant (admittedly a bit of a rarity). If you’re in a position to pay your rent for several months in advance, this provides an excellent negotiating opportunity. Landlords who can’t see the benefit in this arrangement are rarer than cash-rich tenants. For the majority, it is unfortunately a matter of looking around carefully for the best available unit, and paying, except in unusual circumstances, the rent asked for.
Those of you lucky enough to have money in the bank at the beginning of term may well be able to secure property not usually let to students by offering to pay ‘upfront’. It may be painful, but it can really help secure a better unit from a more nervous landlord.
Choosing a property
If you decide to find property through the classifieds
You need to be organised before you pick up the phone. You need a pen and paper, and a list of sensible questions will save you time and disappointments (suggestions are given later in this Lesson). Any responsible landlord will be more than happy to discuss these with you before you traipse miles for a viewing. It can be really frustrating trying to get information on the phone, but persevere.
If the private landlord you are trying to reach is permanently unavailable, or their partner doesn’t know the answer to any of your questions, or indeed if the landlord simply cannot be bothered to chat to you on the phone for a few minutes, ask yourself how interested they’ll be when the boiler breaks down in January. Find a helpful, organised landlord who sounds as if they know what they’re doing.
The real decision is yours
It can often seem much easier on balance to use an agency than to start ringing around the classifieds. Others of you will either not be willing or able to afford the kind of charges that agents routinely levy on tenants. Each tenant must balance the factors and whether or not they can afford an extra few hundred pounds that agencies charge to set up a tenancy, whereas with a private landlord those costs should be minimal.
In addition you must decide whether or not you would prefer to know, and have direct access to, your own landlord, or whether you would be happier dealing through a third party. Not everyone finds the same circumstances comfortable. However, if the agency you called for details doesn’t get around to sending them, or hasn’t the time to discuss a big revenue earner like this on the phone, ask yourself again, just how reliable are they likely to be when that boiler breaks down in January? Find another agency.
The only guarantee in this business
I can confidently guarantee that any conscientious landlord or agent will be responsive and helpful from the outset. If you are having difficulty communicating before you sign the contract, things are unlikely to improve once you have done so.
Some sensible questions to ask before you make an appointment to view any property
- & How much is the rent?
- & What, if anything, does it include?
- & Is it payable weekly or monthly?
- & How much deposit is required?
- & How much rent is required in advance?
- & How is this to be paid – cash, cheque, banker’s draft?
- & Are references/credit references required?
- & How much will these cost each?
- & What is included in the rent – e.g. is there a washing machine (include what you need).
- & How much are the water rates and council tax per month?
- & How is the property heated?
- & Is there an inventory charge, and/or a vacating check charge?
- & What are you responsible for – gardens, hallway cleaning, etc?
If you do make an appointment to view, either keep it or cancel it. Don’t just leave landlords standing outside a property waiting for you to turn up. It is unfair, discourteous and regrettably very common. Personally, I won’t now go to any arranged viewing unless the prospective tenant rings an hour before to confirm that they still intend turning up – and I never wait longer than 15 minutes.