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Ask these questions before you rent!

Serena Cowdy
by Lovemoney Staff Serena Cowdy on 14 April 2012  |  Comments 14 comments

With the mortgage market in turmoil, renting has become the new buying. But don't be caught out! Here are the rip-offs and scams you should watch out for as a new tenant.

Ask these questions before you rent!

I don’t have a mortgage. I’ve been renting ever since I left university, and have had some pretty ‘interesting’ experiences.

Top of the list was the studio flat I once viewed that needed, according to the ad, ‘minor decorative alterations’.

When I turned up, I was faced with little more than a concrete plot next to a motorway. When questioned, the landlord confidently pointed out that the toilet, plumbing, electrical system and - oh yes - the roof - were all going to be installed shortly.

Renting can offer you freedom, greater choice and, in the current climate, even value for money. However, it can also give you a great big financial headache if you don’t ask the right questions on day one.

I’m going to outline the things every tenant should bring up when they view potential properties.

Rent

It sounds obvious, but work out exactly how much rent you’ll be paying before you sign anything. When translating the weekly rental price into monthly costs, remind yourself that four weeks do not a calendar month make!

And make sure you know exactly how much rent is being demanded up front. Some landlords ask for three months’ worth (a friend was asked for a staggering six months) so always double check.

If the landlord is asking for more than a month’s rent, ask yourself why - a landlord with money troubles could go bankrupt and leave you homeless.

Remember, with everyone trying to let the houses they can’t sell, it’s currently a renter’s market. Be polite but firm and hammer down that rent!

Deposit

A deposit equivalent to more than two months’ rent should set alarm bells ringing, for the same reasons as above.

This aspect of renting has become less problematic in recent months, because the Tenancy Deposit Scheme (introduced in October 2007) now helps safeguard tenants’ rights.

In a nutshell, it makes it much harder for landlords to unfairly hold on to your deposit at the end of the tenancy. Read Top Tips For Successful Landlords to find out more about landlords’ responsibilities.

Administration fees

If an estate agent is involved, find out exactly how much you’ll be charged in ‘administration’ fees if you do decide to rent the property. Expect to pay around £100 per person (just to print a new contract off a computer - grrr).

If the fee is much higher than this - or if the service you’ve received has been poor - it’s definitely worth haggling.

Management fees

It’s also worth checking to see if any management fees will apply during your time as a tenant. This is particularly likely if you’re renting a flat in a large block.

These fees are generally meant to cover the upkeep of a building’s communal areas (hallways, communal gardens etc) but they vary widely. Get written specifics from the managing agent before you sign anything, so you know exactly where your money is meant to be going.

Holding fees

Find out how much you’ll be expected to pay as a holding fee, to be kept by the landlord/managing agent while they check your references.

Once you’ve signed the contract, this money should be returned to you - or your other payments should be reduced accordingly. Just make sure this is going to happen before you hand over the dosh!

By paying a holding fee, you’re effectively saying ‘yes, I want to rent this property and I’m not going to do a runner’. If you do change your mind afterwards, you won’t get a refund.

And make sure your references are accurate and complete. If you’re rejected for the property on the grounds of inadequate references, you probably won’t get the holding fee back.

Council Tax

You should work out exactly how much Council Tax you’ll be paying each year - it could even affect your choice of location. I moved to Wandsworth because the Council Tax there was half the price of most other London boroughs.

It’s also worth finding out what Council Tax band your potential property falls into. Generally speaking, the higher the value of the property, the higher the band, and the more you’ll have to pay.

Utility costs

When looking around, think utility costs. That period conversion may be the stuff of dreams, with its polished oak floorboards and original sash windows - but it will also be a bugger to heat.

Clarify what - if any - utilities are included in the rental price. Flats in big blocks, for example, sometimes come with water and even heating costs thrown in.

And to find out just how much energy you’re likely to use, make sure your potential landlord shows you an Energy Performance Certificate.

This will give details of the property's energy efficiency and environmental impact. Any landlord marketing a self-contained property to new tenants has to provide one.

Un/furnished

An unfurnished rental property is usually cheaper than its furnished equivalent. You can really make the place your own, and you won’t have to worry about something nasty crawling out of that yucky old mattress as you sleep…

On the other hand, a house-full of furniture could cost you an arm and a leg. One compromise is to find somewhere with white goods only (essentially a washing machine, oven and fridge/freezer).

If you do take the ‘unfurnished’ route, have a look at Furnish Your Home For £1,000 to find out how to get sorted for less.

That nasty surprise

When you’re viewing each property, don’t let the landlord or estate agent rush you. Look round every room thoroughly and keep your eyes peeled for evidence of nasty surprises that might await you.

When my partner and I were viewing our current flat, I was chuffed to bits that the bathroom had just been re-painted. How white! How sparkling! As it turns out, how desperately they had tried to cover up all that mould.

I lost endless work days waiting for contractors who never turned up. And in the end - fed up with the whole business - I was the one shelling out for the sugar soap and rolling my sleeves up…

This is a classic lovemoney article

More on renting a property:
Tenants: know your rights

Tenants: how to get your deposit back

How to rent out your home

How to cut the cost of moving home

Ten ways to find a good area to move to

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Comments (14)

  • Terrapin1
    Love rating 0
    Terrapin1 said

    LOOT used to have many private landlords advertising -I used it myself for many years as a landlord and always found decent people -agents are mostly useless and just want money from all concerned. As a landlord I can assure you-direct contact is a million times better than dealing with an agent-repairs will be done and any problems will get sorted.

    Where possible go direct and establish a good relationship with your landlord.

    Report on 16 January 2009  |  Love thisLove  0 loves
  • DynamoHill
    Love rating 1
    DynamoHill said

    I'd also ask if the property was on the market to be sold and how long the landlord had been a landlord.

    Report on 16 January 2009  |  Love thisLove  1 love
  • xxzarr
    Love rating 0
    xxzarr said

    I am a Landlord with a number of properties in Cambridge and I use a reputable agent to handle most of my affairs. Using a good, long established letting agency checks out it's tenants and landlords and works professionally. Using an estate agent that has just turned letting agent because of the housing downturn is a very bad move.

    Report on 18 January 2009  |  Love thisLove  0 loves
  • pg1000
    Love rating 0
    pg1000 said

    I am a landlord with a number of years behind me. I am sure that there are bad landlords and agents but I have always tried to be fair. However let us not forget that renting is a two way process - I have had several tenants that did not pay - did a lot of damage before leaving in the middle of the night and all this after "checking" their references. In most cases the guarantors were pursued and were their parents who had acted in good faith but paid for their folly. If you use a good agent you can also use a Letting Insurance. Is there a cost? Of course. Who pays? We all do! I have been amazed that a number of these poor tenants are serial defaulters but they know to disappear BEFORE the court case as this will not then appear on their credit history.

    There are faults on both sides so don't always blame the landlord!

    Report on 18 January 2009  |  Love thisLove  0 loves
  • matchmade
    Love rating 38
    matchmade said

    The article has mostly good advice but, really, an EPC is not worth the paper it's written on. It tells you nothing about the real-life energy costs of the actual property - a far better approach is to ask to see the bills of the previous tenant, though as usual "data protection" (ludicrous) means energy companies won't provide this data themselves.

    I also disagree with choosing an unfurnished property: if the landlord's any good, the furniture will be OK quality and think of all the hassle you save by not having to buy all your own furniture and then lug it around from place to place or put it into storage. Even buying furniture for £1000 is a substantial outlay of time and money compared to the minor additional rental cost for furnished property, and then you're lumbered with the stuff when you move out.

    Report on 20 January 2009  |  Love thisLove  0 loves
  • pdub
    Love rating 0
    pdub said

    I find it quite funny that the first link - recovermydeposit.co.uk doesn't work :) he he Great article thank you!

    Report on 03 April 2012  |  Love thisLove  0 loves
  • Ros
    Love rating 0
    Ros said

    You say in the article that it is currently a renter's market. However from what I have been reading in the press it is not currently a renter's market at all, but a landlord's one, with several renters after each property, particularly so in London and Greater London. I would be very interested to know of where you get the information that it is currently a renter's market please. Thanks.

    Report on 26 April 2012  |  Love thisLove  0 loves
  • nickpike
    Love rating 270
    nickpike said

    Lets hope house prices drop significantly soon. Then we can buy a house.

    The 6 month assured thing at present is a sick joke. There are stacks of rentals, because the owners are hoping the market will pick up 'next year' and then they can sell 'for what it's worth', probably a zillion pounds. They will use tenants as a short stop gap, but the tenants are the last top know. Despicable. The rental market needs sorting like it is on the Continent.

    Report on 26 April 2012  |  Love thisLove  1 love
  • donrobbie
    Love rating 0
    donrobbie said

    All good advice! In addition please note that it is a legal requirement for a landlord to show you a full current Energy Performance Certificate for the property you are interested in.

    This identifies the current status of the property in terms of insulation and possible heat loss and whether any work is recommended to improve things. (The latter could be a useful negotiation with the landlord). AN EPC has to be available within 7 days of the property being marketed (For Sale or For Rent) with effect from 6th April 2012.

    An EPC is valid for 10 years from the date of assessment.

    (Comment submitted by an National Landlord Association Accredited Landlord)

    Report on 26 April 2012  |  Love thisLove  0 loves
  • LandOfConfusion
    Love rating 64
    LandOfConfusion said

    I have to agree largely with what nickpike above says.

    The concept of pretty much any system where you would pay a private individual for the privilege of simply living on a piece of land and receiving the benefits created by the community is frankly disgraceful and in this respect this country seems to have one of the worst implementations of it's kind.

    I mean we have a system where wealth is created and paid for by others and then parasitically transferred from those that produce it to those that consume it. And added to this are the many stories like those contained in the article where some landlords ruthlessly try to take advantage of the poor and the unfortunate.

    What a horrible, nasty country to live in.

    Report on 27 April 2012  |  Love thisLove  0 loves
  • krustallos
    Love rating 39
    krustallos said

    landofconfusion, I've lived this system from both sides, and renting is not only unsatisfactory for tenants but also for landlords - in my experience tenants tend to damage your property, steal your furniture, leave owing money, and occasionally set fire to your house with a dropped cigarette. Landlords at least tend to be zero hassle as long as you pay your rent.

    It's odd though that people begrudge renting a home in a way that they would never begrudge renting a car or a TV. I wonder why that is?

    I think in general the problem is that we used to have a very large not-for-profit housing sector in this country and that has been decimated (at great expense to the taxpayer) by the right-to-buy scheme. People who could have hoped for a council home are now forced into the private market, whether renting or buying, and that has pushed prices up to insane levels.

    If the government enabled councils to build again on a serious scale, we could fix the housing crisis, push house prices back to a reasonable level and perhaps even get out of this double-dip recession - which at this point appears to be largely down to a fall in construction orders.

    The main parasitic transfer of wealth from the producer to the consumer is called Capitalism, by the way. Marx explained very precisely how that transfer is effected. In all areas of the economy the easiest way to make money is to already have plenty to start with.

    Report on 28 April 2012  |  Love thisLove  1 love
  • scarydawn64
    Love rating 1
    scarydawn64 said

    I rent privately and this is the first time I have rented through a mangement company that are a well known estate agent and I must say it is best to rent direct from the landlord if possible

    not only did I have to pay £300 in finders fees (and I found the property myself) but have been disappointed with the service

    the flat I have is ideal but the finish is shoddy. I have requested to change the taps (very shoddy and marked) and the door handles (covered in paint as they couldnt be bothered to wipe their hands when painting) at my own expense but the landlord has said no - no reason given. I also requested that I was allowed to go to a water meter as this would have saved me money and will be compulsory soon but he also turned down that request. Though I understand it is his flat but it is my home.

    Definately my next flat will be with direct with the landlord and one that is open to me making slight changes that benefit his property.

    I did try and get a council flat but as these are now classed as social housing and I have no needs I have no chance - unless I get pregnant irresponsively.

    All I want is a place to rent long term that I can make my home - in this climate I have no chance

    also have to admit being a northerner the cost of renting down South (Bracknell to be exact) is very high but what other option is there. I am lucky I have a reasonably good job but how does someone with a family and a average paid job cope

    Report on 29 April 2012  |  Love thisLove  1 love
  • LandOfConfusion
    Love rating 64
    LandOfConfusion said

    @ krustallos

    "Landlords at least tend to be zero hassle as long as you pay your rent."

    I'm afraid I have no sympathy for landlords and you're absolutely right in that they want minimal hassle - and work - for what they do.

    "It's odd though that people begrudge renting a home in a way that they would never begrudge renting a car or a TV. I wonder why that is?"

    Given what I wrote I didn't think that needed an explanation, but since you asked here's an hypothetical example of Buy-To-Let parasitism at work:

    A BTL'er buys a cheap house in a run-down area. He rents it out. Shortly afterwards the government decides that the local school is failing and so spends money (raised in taxes from everyone (including the tenant)) upgrading the school and employing better teachers.

    That now puts the rental in the catchment area of a much better school. As a result of this what do you think happens to:

    (a) The 'value' of the house (really the value of the land)?

    (b) The amount of rent that the BTL'er can charge?

    Moving on lets now assume that the district and local councils, in partnership with the government, decide to improve the area. They spend, money from taxes on better policing, improving the roads, improving the town centre, improving public transport and in general improving the area. Now that's happened what do you think happens to:

    (a) The 'value' of the house (really the value of the land)?

    (b) The amount of rent that the BTL'er can charge?

    Now that the community has added additional value to the land who profits? You can of course argue that it's the tenant because they actually live there but then they're already paying for it though their taxes. So why then should they then pay you? You didn't contribute significantly to the improvements and yet you benefit from the work of others in that you can now charge more rent and sell your BTL for more money.

    It's as if everyone else works but you profit.

    "the problem is that we used to have a very large not-for-profit housing sector in this country and that has been decimated (at great expense to the taxpayer) by the right-to-buy scheme."

    Thatcher brought in some very damaging privatisations, amongst which were to privatise the social housing system and to privatise the land wealth created by and paid for by taxpayers.

    ”People who could have hoped for a council home are now forced into the private market, whether renting or buying, and that has pushed prices up to insane levels.”

    I think you'll find the removal of Schedule 'A' taxation (which most of the Boomers seem to have conveniently forgotten about) did most of that damage.

    ”If the government enabled councils to build again on a serious scale, we could fix the housing crisis, push house prices back to a reasonable level”

    Not going to happen. For starters Grant “Status Quo” Schapps would never support it. Secondly it would be an eventual BTL-fest.

    ”and perhaps even get out of this double-dip recession - which at this point appears to be largely down to a fall in construction orders.”

    That's an odd thing to say. Tail comes first?

    The recession we're currently experiencing is because people took on too much debt, and that is almost completely because some people paid to much for their housing while others re-mortgaged to the hilt.

    In fact it's almost funny, time and time again we see housing led boom and bust and during this cycle we have the added factor of an incompetent Bank of England, which kept interest rates far too low for far too long. Now they're keeping interest rates far too low because at 3.6% inflation isn't high enough and there's not enough M3 money (all cash, bank deposits and debt) in the system.

    And I'm sure this makes sense to someone, hey Mr Osborne?

    Report on 01 May 2012  |  Love thisLove  0 loves
  • EC1
    Love rating 1
    EC1 said

    Sorry scrawny dawn ... and this isn't a dig, but I just want to set the record straight on something. EVEN IF!!!!! You were to get pregnant irresponsibly this NOW doesn't mean you will be offered a council flat. This has long since changed and too right as often people were taking the (yellow bodily fluid). I just wanted people reading this thread to know that it has been made really difficult now to get a council property if pregnant. You will still be subject to a rigerous panel of questioning and possibly placed into hostels.. not only that but you will more often than not be offered Private renting as a route. Most landlords now just want mortgages paid and so will pass over anyone who is going to claim housing benefit as it takes so long to organise it for someone who has available funds to just rent privately from their own wages.

    It's a sad state of affairs that the govenrment don't make it a blanket policy to educate people and SET THEM STRAIGHT about the housing market and the facts regarding the impact on social housing... but I just thought that I would put in my 2 pence worth having worked in this sector for 12 years. If you have a child there is a statutory right to house the child.. not you, however you and your child will be placed on a waiting list and the length of this list in some boroughs is shoking!!!!! It's enough for this to be a deterrant for anyone hoping to get get pregnant and get a flat (temporary accommodation is not a nice route) my advice if you can help it and there are options out there DO NOT get pregnant if you have not the means to even house yourself.. yet alone an inocent child.

    I have a friend who has done this very thing and it makes me sad that she didn't check her facts ... just because you can have children in this day and age if your roof is not secure why put a child through this unsettlement. I am not judging I just find it hard to understand not planning when we have such amazing contraception options and so much information out there. In any case I just wish her all the best but options for people on low incomes or no jobs are running out very quickly. I remember when rent deposits were very easy to obtain you didn't even need to have a support need.

    Scrawny dawn you make some great points and I wish you all the best.

    Report on 18 May 2012  |  Love thisLove  1 love

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