Costs of Taking on a Tenancy

What can you expect to pay for renting your new home?

In our guide to the costs of renting, we start with the upfront costs of taking on a tenancywhich you pay before you move in – tips on what you should and should not pay, plus safer payment methods.

The second section looks at regular ongoing living costs, so you can assess the affordability of a property, and budget effectively.

Taking on a Tenancy – What to Pay & How to Pay


Never pay money upfront

You should never pay any money before viewings, nor should you disclose personal information or bank/credit details.
Scammers will often try to collect payment from people before showing them a property e.g. a holding deposit to secure the property, admin charges or registration fees.  Legitimate landlords and agents won’t ask for money prior to viewings.

Get written confirmation of costs

Before you agree to a tenancy, get written confirmation of all costs:

Any tenant fees and charges required prior to signing an agreement

Security deposit

Rental price

Any other bills or charges to be included during the tenancy

Keep records of everything you pay.

Tenant Fees & Charges

7landlord with sign-cropped
From June 2019, landlords and letting agents in England have been banned from charging tenants letting fees; they are also already banned in Scotland. (Most admin costs must now be met by the landlord.)
The fees ban in England applies to new tenancies from 1st June 2019. If you signed your contract before June 2019, fees agreed at the time will be payable, but only until June 2020.
However, tenant fees are currently still legal in Northern Ireland and Wales (though they are expected to be banned in Wales from September 2019); charges vary considerably, so do compare agents and try to negotiate if possible, as they can add several hundred pounds to the upfront cost of renting.
Any costs that letting agents can charge, must be made clear to you upfront and should be displayed on the agent’s website and literature.

What landlords & letting agents can charge you for:

  • Rent
  • Council tax and utilities bills e.g. gas, electricity, water (if utilities are included in the tenancy agreement. They can’t charge you more than they pay the service provider).
  • Refundable security deposit (capped at 5 weeks’ rent, where annual rent is below £50,000).
  • Refundable holding deposit (capped at 1 week’s rent).
    You may be asked for a holding deposit if you want to reserve a property while the contract is drawn up and checks are carried out. It should be deducted from your costs if the tenancy goes ahead, or refundable if it doesn’t. Try to have everything ready to sign up quickly and you might avoid paying a holding deposit.
  • Default fees – penalties for lost keys or late payment of rent (2 weeks late or more).
  • Changes to the tenancy agreement e.g. adding a new housemate, requests to keep a pet or run a business from the property. (Charges are capped at £50, unless the landlord/agent can prove higher ‘reasonable costs’).
  • Ending your tenancy early – you may be charged an early termination fee to cover ‘reasonable costs’ for the agent, or any loss incurred by the landlord.


What landlords & letting agents must not charge you for:

  • Tenancy fees to cover admin, setting up a tenancy, obtaining references, immigration and credit checks, landlord inventory checks, check-out fees.
  • Renewing your tenancy  – you cannot be charged for the renewal of a tenancy. If you signed a tenancy agreement before June 2019, any renewal fees agreed at the time will be payable, but only until June 2020.
  • Agents are not allowed to charge for property details or registration; you can register for free with as many agents as you wish
  • Fees for viewing properties
  • Cleaning or repairs before moving in, and charges for professional cleaning at the end of the tenancy.
  • 3rd party services such as gardening, getting a chimney swept etc.
  • Routine inspections during the tenancy


Find out more:

Tenant Fees Act 2019: Guidance for Tenants – GOV.UK
Full details of what fees landlords & agents are/are not allowed to charge, plus what to do if you are wrongly charged


Security Deposit

At the start of a tenancy, you will usually be required to pay a security deposit, to give the landlord some protection in case of damage or rent arrears.  But as long as you keep to the terms of the tenancy agreement, your deposit must be refunded at the end of the tenancy.

Check the following points:


Deposit amount

You should be charged no more than the equivalent of 5 weeks’ rent (or 6 weeks if the total annual rent is £50,000+).

How will your deposit be protected?

For Assured Shorthold Tenancy agreements (which is the usual type of tenancy), your landlord/agent must register your deposit with a Government-approved Tenancy Deposit Protection scheme (TDP).

TDP schemes give tenants protection from unscrupulous landlords/agents stealing or misusing their money, or from losing their deposit should the landlord/agency go bust.  The schemes also ensure tenants are treated fairly at the end of the tenancy, helping to resolve any disputes involving the return of a deposit.

Make sure your prospective landlord/agent does belong to a TDP scheme – check the website to verify their membership.
The most common schemes are:

Tenancy Deposit Scheme (TDS)


Deposit Protection Scheme (DPS)


Verify that your deposit has been protected

Your deposit should be registered with a scheme within 30 days of receipt.
Ask to see the Tenancy Deposit Certificate and keep a record.

How to check if your deposit is protected in a Government-backed scheme – Shelter

Find out how you will get your deposit back at the end of the tenancy.  Keep the information from the appropriate scheme in case you need it later.


Find out more:

Tenancy Deposit Protection – Shelter


Rental Price & Other Charges

Rent will be one of your biggest monthly expenses, so work out what you can afford.  Bear in mind that you normally pay rent a month in advance (including an upfront payment before you move in).

You may have some negotiating power on the rental price, depending on how long the property has been on the market, or how soon you could move in.
Find out:

How much is the rent and when is it due?

What bills, if any, are included e.g. utilities or TV licence?
Some apartment blocks have communal heating and hot water, so these would be included in the rental price.

Are there any other charges you would be expected to pay during your tenancy e.g. service charges?


The agreed rental price, deposit & all other charges must be specified in your tenancy agreement

Rogue landlords/agents sometimes try to add on bogus charges, but you’re not liable to pay for anything that that was not included within the contract.



Financial capability

A landlord/agent will want to assess your financial capability to pay the rent, so they will run credit checks and may request an employment reference, prior renting records etc.
You might be asked for proof of funds or to provide a guarantor  – this is highly likely if you are not employed on a permanent contract.
Alternatively, you could be asked to make advance payments of rent (either the full term of one year, or maybe 6 months with a break clause)


Rent guarantor

If someone is not financially viable for the tenancy, they may be asked to provide a guarantor.
The guarantor always needs to be a UK resident and homeowner;  in most cases, it will be a parent or guardian.
The guarantor will have to sign a legally binding document agreeing to pay the rent or costs if the tenant defaults.
Be aware in a joint tenancy, any guarantor may be held jointly liable for unpaid rent or costs owed by any of the other housemates!

8security-deposit-emptying piggy

The initial outlay

Once you sign the tenancy agreement, it is standard practice to pay a month’s rent in advance in addition to the security deposit.   So that usually equates to a hefty 9 weeks’ rent upfront.  You will need to make sure you have this money available in advance.
Depending on what’s included in the property, remember to budget for furnishings, bedding, kitchen equipment etc.


Find out more:

How much it costs to rent – Citizen’s Advice

For information on financial assistance with renting, if you’re unemployed or on a low income:

Housing Benefit – GOV.UK

Housing Benefit – Shelter


How to Pay

 Teal pig who pays what (white background) cropped
Avoid scams – take care how you pay!

UK banks and building societies are regulated by The FCA (Financial Conduct Authority) and must refund your money if you’re an innocent victim of fraud, provided you have used their services correctly and have not been negligent.

Sensible precautions

Check an individual or company is legitimate before handing over any money!

Private Landlord – Things to Check

Letting Agency – Things to Check

Never sign or pay anything you’re unsure about.  If in doubt, check with Citizens Advice.
Citizens Advice consumer helpline:
03454 04 05 06
Always get receipts for payments at the time of handover, or keep proof of electronic transactions.
Choose a safe payment method:

Payment methods to avoid

🙁   Never pay cash!

🙁    If you’re paying an individual or company that is unknown to you, don’t just transfer the money directly into their bank account.

😥    Do not send money via an online money transfer service (aka wire transfer) such as Western Union or MoneyGram, either to pay a deposit or to prove you have funds. This could well be a scam!


Proof of funds scams 😥 😥 😥

A prospective landlord/agent might ask for proof that you can afford the deposit or rent, in which case a letter from your bank should be adequate.
Don’t be fooled by requests to use an online money transfer service (such as Western Union or MoneyGram) to prove your financial capability.  There’s a well-known scam where you are asked to send money to a friend, and then provide proof of this transaction to demonstrate you have sufficient funds – the scammer will then use those transfer details and forged ID to withdraw the money!  Money transferred in this way can be collected all over the world with minimal proof of ID, and it is then very difficult to trace – therefore a favourite with scammers!   (Note this is not the same as a UK bank transfer, which is more secure).

Payment of deposit & fees

🙂   If you have a credit card, this will give you greater protection (via your card provider) than other payment methods if things go wrong;  but be sure to repay your credit card monthly balance in full, otherwise you will end up paying high interest costs.

🙂   Most debit cards also offer some protection; if there’s a problem, you may be able to claim the money back through Chargeback.

🙂   If they can’t accept credit/debit cards, most landlords/agents should accept a BACs payment e.g. Direct Debit, or a cheque.  BACs protect against fraudulent payments, because users of the scheme are monitored by the banking industry.

Rent payments

🙂   For regular payments like monthly rent, it’s best to set up a bank standing order, to ensure it is paid on time.
However you decide to pay your monthly rent, do track your payments and retain proof in case of disputes.


Find out more:

How to Set up Direct Debits & Standing Orders – Money Advice Service

Online Payments – Get Safe Online

Transferring Money – Get Safe Online


Shelter offers helpful advice on rental contracts and charges, including what to do if you’re having problems with your landlord/letting agent, or struggling with payments.
Avoid Landlord Scams – Shelter

Problems with Renting – Shelter


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