When thinking about the cost of renting, we often focus on the monthly rent and little else. It's understandable to some extent, as that monthly rental figure is the bulk of what you'll need to pay. And unlike buying a home, you don't have to fork out significant fees on conveyancing and stamp duty before getting the keys to your new place.
Yet, that's not to say it's cost-free when you move into a home you're renting. From paying the holding deposit to insuring your stuff, there is some upfront expenditure that you should be aware of. And if you're not sure about what you need to pay before moving in, we're here to answer all your burning questions. So read on to find out the true cost of renting a home.
You will be required to pay a holding deposit as soon as you've had an offer accepted on the place you want to call your new home. The holding deposit secures the property and usually amounts to one week's worth of rent, which is deducted from the first rental payment due.
If you don't move into the property for any reason that's through no fault of your own, you will be entitled to a refund of the holding deposit. However, if you're the one who decides against renting the home after having an offer accepted, the landlord is entitled to keep the holding deposit.
It's easy to get the security deposit and holding deposit mixed up, especially as they're both due early on in the process of renting. While a holding deposit secures the property, the security deposit acts as a safeguard for the landlord if you damage anything in the home.
A security deposit is capped at five week's rent, and there are even some zero deposit options available. You'll need to pay the security deposit before you move in, at which point the landlord needs to register it with an official deposit scheme. The security deposit will then be returned to you at the end of the tenancy, as long as you're not liable for damages. Any damages can also be disputed, with the deposit scheme, which is neutral, having the final say.
First month's rent
You can't move in without paying the first month's rent, so this is a big one. It's due before the move-in date, and the landlord needs to see it cleared in their account before you can officially move in. It's at this point when the holding deposit is deducted, so you will owe a month's rent minus the first week.
If you decide to get professionals to move your stuff then you'll need to pay moving costs. How much you pay depends on the amount of furniture and personal items you need to move. The more stuff you have, the higher the costs.
The average price for a three-bedroom home is £555, so expect to pay less if you're moving to a one or two-bedroom property. You can get a quote beforehand, with most removal companies offering an online calculator to work out the total removal costs in advance.
Anyone moving into a furnished property can ignore this cost. But if you're planning on filling out your new pad with furniture, you're going to need to fork out for sofas, tables, chairs, beds and just about anything else needed for a new home.
Furniture purchases can be one of the most expensive parts of moving into a new home. Therefore, it's good to plan in advance so you get an idea of how much you might need to pay. A new sofa can cost anywhere between £500 and £5,000, just to give you an example.
One of the most overlooked aspects of moving home, contents insurance is a vital part of enjoying your living experience with extra peace of mind. If anything in your new home is a personal belonging of yours, then you should get it covered with contents insurance.
In fact, there are a few different insurance policies that you can take out if you're a renter, but contents insurance is the most popular. It covers everything from your furniture to clothes and items like laptops, jewellery and even cycles in some cases.
The "true" cost of moving
Now that you have a clearer idea of how much it costs to move home, you can avoid any nasty surprises. Being prepared is the best way to go, and it means you can look forward to moving into your new place and enjoying the adventures ahead in your humble abode while understanding what you need to pay in advance.