The Hidden Costs of Renting a House in the UK

If you’ve lived abroad for any amount of time (or even your whole life if this is the first time moving here), then you may not realise the hidden costs that come with renting a house in the UK.

When we lived in Amsterdam, for example, our utilities were included in the cost of our monthly rent and so the only extra bills we had to pay were those for taxes (water, council, business).

But once we moved back to the UK, I suddenly had to – begrudgingly – start paying lots of extra bills again, whose monthly totals can creep up if you’re not careful.

Here are the basic bills you will need to pay every month (on top of rent) to keep the house running.

Agency Fees

If you’re renting your property through an agency (as opposed to a private landlord), you’ll likely have to pay a “referencing fee” which is non-refundable. This is usually around £200 (for two people) and covers the cost of the agency running reference checks on you and having to do basic admin.

Some unscrupulous agencies will try and charge you for all sorts of things on top of this – a “moving in fee”, a “cleaning fee” and more – but if you think the fees charged are unreasonable or extortionate, then try and use a different agency.

N.B. There is a going to be a proposed ban on agency fees, but it will not come into place until at least 2019.

Upfront Deposit (+ Potential Pet Deposit)

As with most countries, you’ll need to put a deposit down on a property before you’ll be able to move in. In the UK, this cost is usually six week’s rent.

The money you pay to the agency or landlord has to, by law, be paid into an approved rental deposit scheme, where it will be protected should any disputes arise between you and the landlord. This basically stops your landlord from withholding your deposit unfairly when you move out.

If you’re moving in with a pet (with pre-approval first, of course), then you’ll probably have to pay a higher initial deposit into the scheme. This value is will be calculated by your agency or landlord and is often the amount needed to cover the cost of new carpets/flooring or paintwork, should your pet damage them. This amount is also fully refundable unless of course, your pet does cause some damage.

Renters Insurance

The cost of building insurance should be covered by your landlord, but insuring the cost of the goods inside the property is down to you.

The most commonly-asked question is: what does renters insurance cost? The answer to that depends greatly on the value of the items in your home. Furniture, electronics, jewellery and cherished possessions all need to be considered – as do more mundane things like kitchen items and clothing. You need to ask yourself: if my whole home caught fire tomorrow and I lost everything, how much would it cost to rebuild my life?

(Sorry – heavy, I know, but these things have to be thought about.)

You can also include additional items on your rental insurance like bicycles, or things that are left in secure gardens or garages.

TV Licence

In the UK, you have to pay a licence fee to watch free TV. I know that sounds insane, but it covers the cost of the national BBC stations and other free-to-view channels to ensure that you can watch a certain amount of channels for ‘free’, without having to have a cable or fibre contract.

It’s a small amount (only around £12/month), but it’s still a monthly bill that many people would forget to include in their budgeting.

You have to pay this fee even if you only watch TV through your laptop via catch-up websites. The government have ways and means of checking this and you’ll be hit with a fine if you try and avoid paying, so don’t even bother.

Phone Line Rental

Even if you don’t intend to have a fixed-line house phone, you still have to have a phone line installed and you need to pay a monthly fee for it. Otherwise, you won’t have internet access.

You can usually get the line rental fee included in your monthly broadband bill, but it’s an extra amount on top of your internet costs that you need to factor in.

(This is sometimes also the case for fibre optic customers, as the fibre optic broadband uses the line as well.)

Council Tax

Every month, you’ll have to pay a princely sum to your local council to cover the cost of your rubbish bin collection, local fire and police services and any other maintenance in your local area.

The cost of your council tax depends on the size of the property you’re renting – you can check how much it will cost using the government postcode search.

Gas / Electricity / Water

It should go without saying that these are necessary monthly bills that you’ll have to take care of yourself. Many companies now offer ‘smart meters’ so that they don’t have to send staff out to manually read your meter and they can sometimes work out cheaper for those who think they’re over-paying each month.

It’s usually easier (and often a little cheaper) to set up direct debits from your bank account for these bills rather than waiting for a printed bill to come through the post.

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