Renting a property is expensive. Renting one in London is… Oh, who am I saying this to? You already know the whole gist, don’t you? Just like you know about all of the perks and benefits of living in a vibrant, colorful, diverse forge of a city that has more opportunities for everyone than there are stars in the sky.
You know that all of the landlord deals, the agency fees, the scouting expenses and the money you need to make a preventive trip to the Smoke just to check out the properties from first hands end up making quite a sum. And you also know they are 100% worth it!
That being said, there are also the so-called hidden costs of renting that may result in a significant dent in the budgets of the unprepared.
Why come unprepared then, if you can check out the article below to know exactly what you are getting yourself into?
There are plenty of deposits for renters that will make you cough up extra quid. Yes, this fact undeniably sucks but look at the bright side – you’ll get your money back eventually.
I hope that thought will be of at least some comfort to you as, when it comes to deposits, you simply don’t have a choice. They are obligatory.
You know what they say, better safe than sorry. This age-old saying is especially true when you are putting your own property at stake. I mean you are, of course, the quintessence of a perfect tenant. I get it. But your landlord does not.
In his or her defense, a landlord is a person who has seen all flavors of cray in a city as vibrant as London. And that’s why your security deposit is the only thing that keeps the landlord asleep at night.
But what is it? What’s the security deposit for?
Basically, you are paying for a month or so of rent upfront. If all is fine, you’ll get your money back as you leave but in case you cause property damage or choose to make a run for it Bonny and Clyde style – the landlord will still have some money to cover some additional expenses. Think of it as a safety net that works for both parties.
While the security deposit is more or less known to many tenants, the Holding Deposit is a bomb drop more often than not.
Your landlord needs to do all of the background checks and during that time the flat or the house is not offered to other housing seekers. This wok takes time and time, as we all know, is money. This is where the holding deposit steps in. You’ll have to cover a week’s worth of rent upfront. This is done to take the property off the market without any financial losses.
Pass all the checks and the holding deposit will be deducted out of your security deposit. However, in the very unlikely case of you failing on this stage, the landlord will get to keep your hard-earned money as payment for his or her time. That’s why I advise you to double-check the requirements and the necessary background checks before you place your holding deposit.
The last thing that’s important to know when talking deposits are the fact that you are not the only one with responsibilities. The landlord is legally obligated to guard your deposit. Feel free to ask about:
- The government approved the scheme of deposit protection your landlord will go for
- Any other information that is relevant to the scheme as well as your understanding of it
The best part about the deposits is the fact that you’ll be getting your money back sooner or later. Not so much with insurance in general and the tenants liability insurance in particular.
What’s the tenants liability insurance? It is what it sounds like – an insurance plan that covers the landlord’s fittings, fixtures, and furniture. In simpler words, if you spill that marinara sauce on an expensive white carpet that can’t be dry-cleaned, the insurance company will take care of everything.
In simpler words, your insurance opens the doors to the break all you want buffet in your rented property.
This may sound excessive as you’ve already paid your security deposit but stay with me on this one: there is a major difference between the two. Your security deposit is there to protect the rent that you pay, not the property inside the flat. And then again, why pay for something from the deposit money if you have an insurance company to cover the costs?
Still not sold? Well, I’m sorry to bring this up, but your landlord has the legal right to demand that you invest in tenant liability insurance.
Do note that, while having the right to make you buy it, the Landlord can’t force you into purchasing services from a particular provider. You are free to do the searching to choose the best fitting agencies and rates.
The price ranges vary from 30 pounds to 100 pounds per year and the packages vary accordingly. You’ll get all the flexibility in the world while sorting this out. That ’s a plus, isn’t it?
What are some other hidden costs of renting in London? Feel free to share your stories with us on Twitter and perhaps you’ll be the one to help out the next person to try out your shoes.