How much will I need to pay before I can move into a rented property? What if I can't afford the deposit?

Whilst it is not possible to state exactly what each tenant will need to pay in every case when taking up a tenancy, there are some usual costs that are incurred in most cases, and this will act as a guide (including where to find the information and what to ask your prospective landlord or agent), in order that you can ensure you understand the cost of moving into a property.

Costs will commonly include:

Holding Deposit (a fee charged prior to commencing referencing by an agent to hold the property whilst referencing takes place, to demonstrate interest and commitment to the property. Once referencing is completed and the tenancy accepted, this money is put towards the funds taken for the commencement of the tenancy, usually towards the first months rent).

Costs for and during the tenancy will include :

• Rent for the tenancy (usually for the first month of the tenancy, paid in advance)
• Deposit for the tenancy (capped at 5 weeks rent for tenancies with £50,000 rent per annum or less) (6 weeks rent for tenancies with rent over £50,000 per annum)
• Payments in the event of a default e.g. loss of keys (£50, or more if evidenced with invocies or receipts to show the reasonable costs incurred)
• Payments if default in rent payment (i.e. failure to pay/paying late) - chargeable at 3% above Bank of Englad base rate, from date due, applied to the tenant after 14 days late
• Payments where the tenant requests a variation to the contract (£50, or more if evidenced with invoices or receipts to show the reasonable costs incurred)
• Payments for utilities, council tax, television licencing, communication services or Green Deal charges
• Payments where tenant requests to surrender the contract outside the terms of the contract/in breach of the contract (£50, or more if evidenced with invoices or receipts to show the reasonable costs incurred)

When considering a tenancy you must be aware of the funds required to take on that tenancy and ensure they are affordable so that you don't later get into financial difficulty. The referencing process is a way of checking that you can afford the property (based on typical industry guidelines) that you are considering renting.

Affording the Deposit

Whilst you may be able to afford the ongoing rent, you may find that the deposit causes some concerns. If you don't have the money for a deposit there may be a rent deposit, rent guarantee or bond scheme that can assist you.

Rent deposit schemes help people who can't afford a tenancy deposit up front when trying to rent from a private landlord. These schemes are usually run by a local council or housing association or sometimes by a charity:

• Rent deposit schemes offer loans that are provided to be used as deposits, and usually, the scheme lends you the money in advance and you pay it back over a period of time from your wages or benefits.

Alternatively,

• Bond schemes or rent guarantee schemes are usually run by a council, housing association or charity.

Under these schemes, the provider issues a written guarantee to your landlord to cover losses due to unpaid rent or damage instead of a cash deposit. When you sign up to a guaranteed rent or bond scheme, using this method you usually have to agree to repay the council any money it has to pay the landlord or letting agent, and when your tenancy ends, your landlord can ask the scheme-provider to pay for damage you caused or rent you didn't pay (often up to a maximum of one month's rent). If the rent deposit or bond scheme provider has to pay your landlord, you will be asked to repay the money to the scheme.

Who is eligible for help?

Different Schemes have different rules on who can apply and who will be eligible for help.

Schemes run by local councils often provide help to families who are homeless and have priority needs e.g. your children live with you.

Schemes run by charities offer help to certain groups of people such as families with young children, single homeless people with alcohol or drug problems, ex-offenders or people with a history of rough sleeping.

For assistance it is best that you start by contacting your local council.