Renting a home
Renting your home is often a necessary step before being able to buy a home of your own. It can also be a stepping stone if you’re an existing homeowner who wants to sell up before buying your next home. In the long term, renting is more expensive than buying and has plenty of drawbacks – but it does have some advantages too.
Here are some tips for getting the most out of renting and avoiding some of the pitfalls.
Is it better to rent or buy?
The simple answer is that it’s always better value to own your home if you possibly can. However, it usually takes many years to save enough money for a deposit, so renting is often the only option (other than living with your family).
The more sophisticated answer is that renting can be cheaper than buying for around nine years, if all other factors are equal. So if you had money for a deposit but invested it instead of buying a home, then you could actually be better off for nearly a decade before the total cost of renting overtakes the cost of buying.
There are a few other advantages to renting, such as:
- Flexibility – it’s easier to move to different places quickly
- Maintenance – a good landlord will take care of the property
- Furniture – a furnished let means you save on buying furniture
You may also decide to rent in between selling your home and buying your next. The advantages of this are:
- Being a cash buyer (putting you in a strong position to negotiate a lower price)
- A shorter housing chain (improving the chances of a swift completion)
In most cases, renting should be a step on the road to owning your own home – whether this is a few months away or many years in the future.
What are my legal rights as a tenant?
Being a tenant gives you certain rights by law. These include:
- Living undisturbed in a safe property that’s in a good state of repair
- Knowing who your landlord is
- Having a written agreement
- Not being evicted for unfair reasons
- Having your deposit protected and returned to you when you leave, unless you have caused any damage that needs paying for
- Being able to challenge any charges that you feel are unwarranted or excessive
- Being given 24 hours’ notice if your landlord wishes to enter the property
These are just a few of the legal rights you have as a tenant. However, there can be disagreements over what counts as ‘fair’ or ‘excessive’, so there may be occasions when you need legal advice.
What am I responsible for as a tenant?
You must pay the agreed rent (even if you’re having a dispute with your landlord) and other agreed charges like bills and council tax. You must allow your landlord to inspect the property and carry out any necessary repairs, provided they give 24 hours’ notice (you have the right to refuse entry if they don’t give 24 hours’ notice, but of course you can invite them in anyway).
If you wish to sub-let the property, you must obtain permission to do so from your landlord first. A solicitor can help you understand the finer details of what these responsibilities mean.
How can I make sure I get my deposit back?
By law your deposit should be protected, either by the Deposit Protection Scheme (DPS) or your landlord. This means that if you take good care of the property you should get the full amount returned to you. Getting a deposit back can be a headache (landlords may dispute about the property’s condition, or simply procrastinate), but there are steps you can take to protect yours.
When you first move in, make sure you scrutinise the inventory, take a note of any existing damage and confirm these with the landlord. You can refer back to this, and the tenancy agreement, when you’re moving out to make sure everything is as it should be and that you’ve done all the necessary cleaning tasks. If anything has broken, speak to your landlord about whether they will allow you to replace or fix it – you might find this easier than allowing them to take the cost from your deposit. Also take photos of the property and any furniture when you leave so you have evidence of exactly what it was like when you left it.
If you’re having trouble getting your deposit back, speak to a solicitor.
Should I move into rented accommodation when I sell my home?
If you’re selling your home, you may decide to sell up first and move into a rented property. This makes you a cash buyer, putting you in a strong position with potential sellers. You may therefore be able to negotiate a lower price, as you are ready to move at shorter notice and don’t have a chain below you.
The potential downside of doing this is that property prices may rise while you are ‘in between’ homes, reducing your buying power. Of course, if prices fall during this period, your position will strengthen – so you’re taking a bit of a gamble.
What about the practicalities of renting an in-between home? You may decide you can ‘rough it’ for a short time, but your home still needs to be practical. It’s a good idea to move only the bare minimum of furniture into your rented home and put everything else in storage, to save packing up twice.
Where should your rented home be? If you’re planning to move some distance away, it may make sense to rent in that area to help with your home-hunting. On the other hand, you may have reasons to stay in your current area for the time being – or move to somewhere in between the two.
A key challenge is finding a suitable short-term let. Estate agents offer short-term leases ranging from a few weeks to six months (sometimes on a rolling basis so you can stay longer if you need to). You can also find short-term lets on sites such as AirBnB, which may offer greater flexibility. You want to be able to time the period of your let to match as closely as possible with the completion date of your home purchase. This way, you won’t end up in a situation where you are paying both mortgage and rent.
Bear in mind that the rent on short-term lets can be around 30 per cent higher than on standard rental accommodation.
Tips for living in rented accommodation
- Shop around
A rented home is still your home. Check each property you view for signs of damp, damage, bad plumbing, insecure locks etc. Also check out the neighbourhood (and neighbours) for anything that might make life unpleasant (such as excessive noise). The rental market can be highly competitive so you may be tempted to take the first property you find, before someone else snaps it up. Resist the urge to rush in, as you’ll have to live with your mistake for several months or more. Patience and persistence will pay off in the end.
- Learn how to live in shared accommodation
If you’re living with flatmates or housemates, choose them carefully. Agree basic rules between you and ensure everyone is happy with them. Avoid sharing a joint account for things like bills and rent, as this can affect your credit rating when you come to seek a mortgage. Instead, be clear about each person’s responsibility for bills, rent and council tax, and make this part of the house rules.
- Insure your belongings
Your personal belongings are not normally covered through your landlord’s buildings insurance, so insure these if they will be costly to replace.
- When you move in, remember to…
- Take photos
- Find the stopcock for the water
- Note the meter readings
- Ask for a gas safety record
- Check the smoke alarms and CO alarms are working
- Check the inventory against the contents and note any unrecorded damage
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