Renting in London:moving flat now costs £2k with letting agent fees - but there are cheaper ways

Starting your first job? You’ll probably be looking to rent, too, but costs can be a shock. But there are ways to keep fees down...

August is always a manic time for London’s rental market as a combination of UK students, twenty-somethings starting their first job and overseas undergraduates search for their first accommodation.

This rush of exuberance about all things new might give London a summer buzz but there is another group smiling too — rental agencies. According to SpareRoom.co.uk, the average cost of moving to London has surpassed £2,000, with a chunk of London agencies pocketing over £400 in fees.

Finding your first place to live in the capital can be an expensive shock. For those moving to London for the first time, often alone and unfamiliar with the geography, the logistical challenges and anxieties are even tougher.

It is essential to find the right location, which ideally will be close to a fast commuter link to your new place of study or work. 

With so many unknown factors, it is understandable that 70 per cent of renters go through a letting agent. Well-respected agencies can be a godsend for new renters. They can advise on areas, often provide transport to viewings and generally help you to secure your new accommodation quickly. On the other hand, rogue agencies can leave you poorer and disillusioned.

FEES FOR EVERYTHING

Unfortunately, using an agent also piles on the costs. In addition to the now-standard six weeks’ deposit required in London, there are admin fees; fees to draw up the tenancy agreement, further fees to write an inventory, yet more fees for credit checks and references and still more to reserve the property. Added together, fees cost almost 30 per cent of London renters upwards of £300 and 15 per cent pay in excess of £400.

Many of these fees are often non-refundable — while the non-refundable holding deposit required by almost 10 per cent of London agents or landlords makes no sense to anyone.

London rental agencies can be even more punitive on the landlord. And though tenants are not going to feel sorry for landlords, the buy-to-let tax changes, and the agency fees landlords face, are inevitably going to get passed on to the tenants, which is one of the reasons rents are so high.

You can cut costs as a tenant if you are willing to do a bit more of your own research and transport yourself between properties. Internet portals could become your new best friend, and typically, they either advertise available rooms, or they focus on whole flats and houses.

USE THE INTERNET

SpareRoom.co.uk is Britain’s leading flat and house share website with almost six million registered users. Established in 2004, it’s the only flat share site featured in the Hitwise top 10 UK property sites, currently at number three. Other well-known options include moveflat.com and Gumtree.

These sites connect you directly with the landlord/home owner, letting you get the measure of the person you need to ring should the boiler break down in the middle of winter. And it is cheaper to cut out the agency. In addition to lower fees and potentially lower rent, Spareroom also found that only 30 per cent of tenants who dealt directly with the landlord had to stump up a six-week deposit. 

Matt Hutchinson director of Spareroom.co.uk says: “We always advise tenants to view the property in person, and meet the landlord before handing over the deposit.

“Avoid transactions that can’t be tracked. Transferring money via bank transfer is the best way to pay a deposit as it can be traced to an individual bank account so, if a landlord requests payment by any other method, alarm bells should be ringing.”

If you’re lucky enough to have a group of friends with whom you plan to rent a whole flat, internet portals can also save you money. Primelocation, Rightmove or Zoopla are all popular places to start, but as you scroll through the listings you’ll see one very common phrase: “Fees apply.” To keep these to a minimum try focusing on online agencies such as OpenRent, the fastest-growing tenant find service in the UK.

Not only does this platform boast 100 per cent guaranteed availability of all the properties on its site, agent/admin fees are banned and tenants are only charged £20 each for referencing, if required.

Best of all, there are no non-refundable holding deposits. Should you decide to pay to reserve a property, your deposit is held securely and either counts towards your overall deposit — minus any referencing costs — or is refunded if your application is unsuccessful.

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