One of the hardest lessons to learn when one moves to London is that the real estate market in the UK is not what one is used to. Whether it’s the terminology or the processes that differ, here is a brief overview of how to “translate” your flat-finding experience.
Talking the Talk:
rentals = lettings
real estate agents / realtors = negotiators
lease = tenancy agreement
Walking the Walk:
When you individually approach lettings agencies, wear your walking shoes. The real estate industry is still largely unregulated in the UK, and MLS (“Multiple Listing System”) does not exist. This results in highly localised property coverage for each agency–they only hold lettings for landlords lcoated in the immediate vicinity, which places a lot of pressure on you to already know what specific neighbourhood you want to live in. If you’ve never been to London before or even only visited once or twice, how can you be expected to know that? Word of mouth and online research can only take you so far. It’s true that there are agencies that will coordinate with one another on what they call “split deals” (for which they’ll share the commission if one agency finds a tenant for another agency’s property), but not all participate in this sort of collaboration. Thus, the flat-seeker must consult several different agencies in order to see a decent representation of what is available out there, rendering it all a bit hit-or-miss.
A common term stipulated in tenancy agreements in London is the “break clause.” The break clause is basically an ‘out’ for you if you wish not to stay in a property for the full duration of your original agreement. The usual requirement is that you notify the landlord 2 months in advance of exercising the clause; failure to do so will result in the forfeiture of your deposit. So, for instance, if you have just signed a lease commencing 1 January with a 6-month break clause and eventually plan to move out at the end of June rather than December, you must notify your landlord/agent by the end of April to be refunded your initial deposit. [Tip: If you actually do only want to reside in the property for 6 months or some such shorter duration, we recommend still signing for 1 year, but with a break clause that will allow you to leave at your originally desired time. This could save you money, as lets shorter than one year may be rented out for a premium]
Speaking of deposits, let’s address standard upfront payments due at the signing of your tenancy agreement. While “standard” is a bit misleading as there is no set industry requirement consistent across all agencies, it is fair enough to say that a majority of contracts require a security deposit of 6 weeks’ rent and the 1st month’s rent in advance. If you are a student, landlords typically require you to pay 3-6 months’ rent upfront, unless you procure a UK-based guarantor who will vouch for the funds should you default.
Acceptable methods of payment for lettings agencies include bank transfers, credit cards (for a 3-5% extra charge depending on the type of card), and checks (or as they would spell, “cheques,” which must be cleared in their account before you can move in). Needless to say, if paying with bank checks or travellers checks, they should be denominated in GBP, as foreign currencies could take up to 10 days if not weeks to clear.
In addition to the requisite deposit and advance rent, central London lettings agencies usually charge administrative fees that can range from £150 to £275, plus up to £35 per personal reference that you provide for their reference check. Another cost you may incur is inventory at check-in (when moving into your flat), which is handled by a third party company and could cost £100+ depending on the size of the property.
The good news is that London Relocation Ltd. will organise your viewing day with multiple lettings agents to capture a broader property spectrum than you could otherwise in a timely manner, let alone in one day! We will review with you your tenancy agreement terms to ensure there are no surprises and clauses are amended as agreed upon by you and the landlord. We will also absorb the admin and other tacked-on fees, so they are no cost to you.
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