Your deposit is one of the biggest financial outlays as a renter, and it can be a challenge raising the funds. How much can you expect to pay? Let’s take a look at some averages, answer some FAQs, and share some top tips.
How much is a deposit for rent?
This varies, as it’s usually the same as 4-5 weeks’ rent. For properties whose rent is more than £50,000 a year, this increases to six weeks’ rent. You shouldn’t be charged more than this, in accordance with the tenant fee ban.
How to work it out
You can work out how much you should be charged by using this simple sum:
1 month’s rent x 12 / 52 = 1 week’s rent
- Multiply your monthly rent by 12 (to get the annual rent)
- Divide that number by 52 (to get the weekly rent)
- Multiply the weekly rent by 5 to get 5 weeks’ rent
The holding deposit cap
Holding deposits are also capped – this time at a maximum of one weeks’ rent. This allows you to reserve a particular property, but doesn’t necessarily guarantee the tenancy will go ahead. If it doesn’t, in most cases, you should get the money back in full. These are separate to the security deposits mentioned above.
Will you have to pay rent in advance?
Another financial outlay might be paying the first months’ rent in advance, or perhaps 2 months. This can differ depending on your landlord and your tenancy agreement.
This way, you’ll always be paying rent for the month ahead.
If you’re renting with bad credit, or there’s a problem with any of your references, you might be asked to pay several months’ rent in advance.
It’s important you get clear information from your landlord or letting agent with regards to your deposit – in writing also. You need to know how much you’re paying, when you’re expected to pay it etc.
While every situation is different, here are the answers to some frequently asked questions:
Do you have to pay a deposit?
Most landlords will require a deposit as some form of protection, for example from damage. However, deposit alternatives do exist, usually involving a one-off, non-returnable fee. They’re not for everyone, but can be an option for those struggling to raise five weeks’ rent at once.
What if you don’t have enough money for a deposit?
- Ask friends or family for help
- Delay renting until you can afford it
- Consider a ‘deposit replacement scheme’ or ‘zero deposit scheme’
- Club together with friends or housemates
When might your deposit be deducted?
As mentioned, a deposit is taken in the interest of the landlord’s security, so deposit deductions are usually around damage, either to the property itself or its contents.
If you have broken the terms of your tenancy agreement, both you and the landlord have to agree on the deposit return and how much money is deducted from it. This should fairly represent the cost of any repairs required.
What can you do to avoid deposit disputes?
Here are some tips:
- Build a good relationship with your landlord
- Inform them of any repairs that need carrying out during your tenancy
- Look after the property
- Clean the property thoroughly before leaving
How do you know your deposit is safe?
Your deposit must be placed in one of these accredited deposit protection schemes (if you live in England and Wales):
These ensure you get your full deposit back if you: meet the terms of your tenancy agreement, do not damage the property and pay the rent and bills on time.
Your landlord must put your deposit in a scheme within 30 days’ of receiving it. They must inform you of this, and which scheme they’ve used.
When do you get your deposit back?
The deposit must be returned to you within 10 days of you/ your landlord agreeing how much you’ll get back.
What other costs do you pay?
The deposit isn’t the only cost you’ll need to pay, other bills when renting include:
- Monthly rent
- Utility bills (unless you have bills included)
- TV licence
- Contents insurance
Consider your salary, living expenses and other costs to work out how much rent you can afford.
How can you save money when renting?
Budgeting is absolutely key, factor in not just the cost of your rent but also other monthly outgoings.
A great way to save money when renting is to switch energy suppliers. You have the right to choose if you’re responsible for paying your bills – and you could put more money in your pocket each month! See how much you could save below.
Last Updated: December 15th, 2021