What do I need to pay before moving into a new property?
When renting a property, you will usually be required to pay a holding deposit, a security/damage deposit, and the first month’s rent. These are typical rental property costs that tenants should be prepared for.
What is a holding deposit?
The holding deposit is another name for a reservation fee, paid to the agent as an agreement that you will be going ahead with the property. In return, the agent should remove the property from the market and cease further viewings. The holding deposit may be non-refundable if you back out of the deal but it will also be deducted from the first month’s rent if you proceed.
What is the security/damage deposit?
The security/damage deposit is typically the equivalent of 5 weeks’ rent but can vary depending on the type of lease. This deposit is one of the key rental property costs and is held as insurance against any potential damages to the property that are deemed to be the tenant’s responsibility. If the property is returned in the same condition it was received, the deposit is likely to be returned in full.
Where is the security deposit held?
In the UK, the security/damage deposit should be held in one of three protected custodial or insurance-based schemes: either MyDeposits, the DPS (Deposit Protection Scheme) or the TDS (Tenancy Deposit Scheme).
How do I get my security/damage deposit back?
At the end of the tenancy, a check-out will usually take place, and an inventory check-out report drawn up, including a schedule of conditions. Both tenant and landlord receive copies of the check-out report for comparison against the check-in report.
If the landlord is not happy with the condition of the property, they can make a claim for deductions from the security/damage deposit. If the tenant disagrees with the proposed deduction, the case will be referred to the deposit scheme, which will adjudicate and make a ruling on the charges. No money will be released to either party until an agreement has been reached.
