Pound symbols on green background
4 min read
Phil Spencer MBE Founder Move iQ

How to Watch Your Budget When Renting

Have you ever purchased something that wasn’t quite within your price range? We’ve all done it, and we all know we should have been more sensible and budgeted beforehand. It’s especially important to watch your budget when renting a property.

Rent is possibly one of the largest financial outgoings we make on a monthly basis. Fortunately, we’ve put together a guide on what to look out for when it comes to your finances and keeping on top.

Read on to find out how to watch your budget when renting a property and become a smarter tenant.

Working out what you can afford

Before you embark on a rental, you need to establish if you can afford the ongoing monthly rental costs. Keep in mind that the cost of living is always much higher than you anticipate it to be.

What considerations, therefore, should you take into account when watching your rental budget?

Your monthly salary

Most rental agents require an applicant’s gross salary to be at least 2.5 times the monthly rent, just so they can assure the landlord that you aren’t going to default on your rent payments.

Other outgoings

You won’t just be paying out for rent each month. Expect to have to pay:

It’s also an option to ask the landlord, previous tenant or rental agent for an idea of monthly bill costs.

You then have your own personal outgoings to consider:

  • TV License
  • Contents insurance (the landlord will cover the buildings insurance, so you just have to ensure your belongings are covered)
  • Tenant insurance
  • Car insurance (the cost of this may change if you’re moving to a different post code area)
  • Internet/Telephone
  • Mobile phone

Keeping your budget in mind, it’s important to also include all the miscellaneous costs that will eat away at your monthly income, such as:

  • Food
  • Transport costs
  • Gym membership
  • Childcare
  • Car costs

Once you’ve taken into account all of your regular monthly outgoings, you’ll be left with a rough estimate of how much you can afford to pay towards rent each month, thus determining what property you can and can’t afford.

Always be cautious and try to overestimate, rather than underestimate outgoings. You don’t want to find yourself running out of cash a few months down the line because you forgot about a large payment, such as a student loan.

Rent deposit

Before you move in, you’ll usually need to budget for any permitted upfront rent and a tenancy deposit, depending on where in the UK you rent. This is in case anything is amiss and the rental company or landlord needs to pay for any damages. In England, landlords cannot ask for a tenancy deposit above the legal cap, and the Renters’ Rights Act has restricted rent in advance for assured tenancies. Landlords also cannot ask for a higher deposit because you have a pet. Deposit rules vary across the UK.

If there’s no damage, you’ll get all of your deposit back. You can then use this as a deposit for the next rental property, but until you have this buffer, you’ll have to factor it into your budget.

If you can’t afford the deposit, speak to your local council about any rent deposit, bond or guarantee schemes that they might offer. Some rental companies won’t accept this, but it’s always worth enquiring.

Letting agent’s fees

Letting agent fees are now banned or restricted in many parts of the UK. In England and Wales, landlords and letting agents can only charge certain permitted payments. In Scotland, most upfront fees charged to tenants by landlords or letting agents are unlawful. In Northern Ireland, letting agents should not charge tenants for services carried out on behalf of the landlord, such as setting up or renewing a tenancy.

You should not usually be charged separately for:

  • Mandatory inventory fee
  • Tenancy reference fee
  • Renewal fee
  • The agent’s own admin fee

If you rent through a private landlord, the same legal rules on permitted payments may still apply, depending on where in the UK you rent.

Moving costs

You’ll need to consider the cost of moving when switching properties, which can cost upward of £500.

In addition, should you be transitioning into a smaller house or apartment, you may also need to pay to store your excess furniture and belongings elsewhere. Keep this in mind when you’re looking for a new place to rent.

Furnishing costs

When you move into any property, furnished or unfurnished, check who is supplying the electrical white goods, and what condition they’re in. You may have to supplement what is provided, or you may have to buy them yourself.

If you move into an unfurnished property, you’ll have to buy all the furnishings to make it habitable. These costs can quickly add up.

Using an affordability calculator

A useful tool to use to work out how much rent you can afford is an affordability calculator. This helps you get a good idea of the funds you will need to move forward with renting a property and to avoid any nasty surprises.

Finally, it is worth remembering that if you default on a rent payment, it can not only damage your relationship with your landlord, but it can negatively affect your credit rating. If you don’t pay your council tax, your council can take enforcement action, including applying to the magistrates’ court for a liability order. If you don’t pay your utility bills, you could face debt recovery action or changes to how you pay, so contact your supplier early if you are struggling.

If you keep on top of your outgoings, taxes and any other additional costs, you’ll have no trouble understanding your budget and making sure you’re renting within your means.

Once the essentials are calculated, you’ll be well on your way to renting the best property possible!

Looking for more knowledge on a property, its surroundings and local services? Phil Spencer’s Property Report offers detailed information on everything you need to know. Get yours here.

Last Updated: June 11th, 2026