Renting a Flat in London
Who is Involved. How the Process Works. How much it costs.
How the Process Works
1. Determine your Budget
Before starting your house hunting you need to know how much you can afford. Council tax is usually on top of the quoted rental price so make sure to add this into your budget. You can find advice on how to determine your budget here or use the My Great Move budget app.
2. Choose 2 - 3 Neighbourhoods
Narrow your search based on: your budget, transportation options to work / school and the type of neighbourhood that suits you. London is huge and you have to work with different estate agents in every neighbourhood. Pick 2-3 areas to focus your search. Research areas and use the My Great Move Neighbourhood app to find your perfect neighbourhood at http://www.mygreatmove.com/where-to-live-in-london.
3. Search Online
Use a property search website like RightMove or Zoopla to search for properties within your budget and in the neighbourhoods you are focusing on. Contact the estate agents to set up a viewing as soon as possible. Many estate agents leave attractive listings online long after they have been rented or sold so don’t be surprised if the property you want is not available.
4. View Flats
London is a very competitive market, which means attractive properties go fast. If you find a property you like online, be prepared to set up a visit with the estate agent that day or the next day. And if you like a property, be prepared to make an offer shortly after viewing. This means you need to know what you want before you view a flat.
5. Make an Offer
Congratulations! You've found the perfect flat. Now you need to pay a holding fee to show you are serious about the property. You may want to negotiate move in dates, painting the flat etc. as part of your offer, but be careful, if this is a great property, there is probably going to be a lot of competition and you may lose it to someone else if you negotiate too hard.
6. Reference Checks
Before your offer is officially accepted, you will have to go through a reference checking process. This is managed by the estate agent but they will use an external referencing company. You will need the name, address and contact details for your previous landlords (usually for the past three years). If you are new to the UK, you may also be required to include a letter from your employer or a UK based guarantor. Once the reference company passes you, you can sign the lease!
7. Signing the Lease
You will need to pay the security deposit and first month’s rent before signing the lease. These are typically paid to the estate agent who then pays the landlord. When signing the lease, everyone who will be listed on the lease must be able to physically go to the estate agent’s office to sign the lease before the move in date. The lease cannot be faxed or sent electronically so make sure everyone is able to get there in time!
8. Keys and Inventory
You will pick up the keys on the first day of the lease (be careful if this is a Sunday as most estate agents are not open). You will need to fill out an inventory checklist of all the furniture etc. in the property and capture any pre-existing damage to the walls, counters etc. so that you don’t get charged for it when you move out!
Enjoy you new Home!
Time to settle in and start enjoying this great city!
How much it costs
Holding Fee
You will get the fee back if:
- Your offer is not accepted
- The landlord backs out before the lease is signed
- Or if everything is successful and you sign the lease
You WILL NOT get the holding fee back if:
- Your reference checks are not approved
- If you decide to remove your offer
If the landlord accepts your offer, this should secure the flat for you although landlords can still back out any time before the lease is signed if they change their mind or if they end up getting a better offer. Landlords are supposed to commit if they accept the offer but there are no regulations preventing them from backing out and there is no cost to them if they do.
Admin Fees
Security Deposit
A deposit you pay when you move in to pay for any damages to the property or the furniture within the property while you live there. The landlord is required to hold the deposit in a special account (learn more here). When you move out any damage to the flat, missing furniture, cleaning requirements or unpaid rent will be deducted from the security deposit
You will have to transfer the deposit to the estate agents before moving in (so make sure you can access the cash).
First Month's Rent
Most landlords will require you to pre-pay the first month's rent before you move in. A month after you move in you will then pay rent for the next month and pay each month until the end of the lease.
Listing Fee
This is the fee paid to the estate agency for listing and showing the property.
Occasionally the landlord passes this fee onto the tenant but you can often negotiate to have the landlord pay or to split the fee if they ask the tenant to pay this.
Salary vs. Rent
Most estate agencies (or the reference companies they work with) have a minimum salary vs. rent requirement (the requirement can often be that your rent cannot exceed 30-50% of your salary). The specific requirement varies from estate agent to estate agent and depends on your type of employment and salary level. If you do not meet this requirement, you can pay an additional deposit to make up the difference. It's a good idea to ask the estate agent what their requirements are before viewing a property.
Who is Involved
Estate Agents
What they Do: Estate agents manage the selling or renting of a property. They are hired by the owner of the property and therefore are incentivised to rent a property for the highest price they can.
When you use them: If you want to rent or buy a flat or house, you will have to interact with estate agents. When you find a property you like, you call the estate agent listing that property and book an appointment to view it.
What you should know: Estate agents only represent specific neighbourhoods. If you want to view properties in multiple neighbourhoods, you will have to work with different estate agents (even if they work for the same company). Each estate agency only lists certain properties available in a neighbourhood so even in one area, you will have to work with multiple estate agencies. Let the fun begin!
Estate agents in the UK don’t have a great reputation and are known for showing properties outside of a person’s budget in an attempt to get a higher commission or they list attractive properties on their websites that are no longer available.
Search Agents
What they Do: Property agents work with multiple estate agents to show you several properties within a short period of time (sometimes one day). They work for YOU not for the landlord and help you through every step of the process from finding the right neighbourhood to negotiating the lease to getting the keys.
When you use them: If you (or your company) can afford them, you should hire one. Having someone who knows London working for you takes a lot of the stress out of finding a place to live and settling in.
What you should know: You should still do your own research on the different neighbourhoods to find ones you might be interested in. Don’t just rely on the search agent’s advice.
On the day of viewings you will focus on one, possibly two, neighbourhoods so you will need to focus your search areas (although they will help you with this).
They typically charge 1 months rent as a service fee and often have a minimum fee of around £1,500 (but it depends on the agency).
Tip
If you can affored to hire a search agent, do it. Having someone else manage the estate agents and finding a place to live in one day is priceless. Email Mat at London Relocation (our favourite search agency) to learn more.
Reference Companies
What they Do: Reference companies check your employment status and previous landlord references to ensure you can afford the rent and have a good track record with your previous landlords. The estate agents you work with will have a specific reference company they work with.
When you use them: After your offer has been accepted, you will fill in a form at the estate agent’s stating your employment details and previous landlords’ contact details.
What you should know: If you do not pass the checks, you will not be able to sign the lease and you will likely not get your holding fee back.
If you are new to the UK, they may only check your employment status and salary so it’s a good idea to have a letter from your employer stating this. If you are a student or are looking for a job, you are unlikely to pass the reference checks without a UK based guarantor.
Guarantor
What they Do: Someone based in the UK who agrees to pay your rent if you are unable to pay
When you use them: If you are a student or are looking for a job in the UK, you will almost certainly be required to have a UK based guarantor.
What you should know: Typically to qualify as a UK based guarantor the person must own a house / flat in the UK, have a salary of certain threshold and be willing to sign a document stating they will be responsible for your rent should you be unable to pay.
If you do not know someone in the UK who can or is willing to be your guarantor, you will be asked to pay several months rent in advance (often up to 1 year).
Tip
Usually flatshares do not require you to have a guarantor so if you need a guarantor and don't have one, a flatshare might be your best option. Spareroom.com is one of the most popular flatshare websites. You can browse what's available for free or sign up for a subscription for access to properties earlier.
Tips
Do your research, be prepared to see a lot of flats before finding the right one and narrow your focus to a few specific neighbourhoods.
Get a bank account and transfer the money you will need for the fees and deposits as soon as possible. Find out more about how to get a bank account at www.mygreatmove.com/banks.
London neighbourhoods can be very different during the day and at night. Make sure you visit the neighbourhoods you are interested in both during the daytime and at night.
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