Ten money saving tips: Beware pitfalls of renting

The ongoing squeeze on mortgages means a lot more young people are renting rather than buy their first homes – and renting for longer – while even established owner-occupiers are renting for the first time, albeit temporarily in most cases. But the market in Scotland is evolving, presenting both challenges and opportunities for those new to renting.

1 Location, location, location

Renting is no different from buying in that a basic property in a prime location is likely to be more expensive than an excellent property in a poor location. However, within this remit there are many variations and choice will depend on individual circumstances. For example, in Edinburgh (and increasingly in Glasgow) people are prepared to pay more to rent a flat in the city centre in return for the convenience of walking to work.

2 Agent or DIY?

It’s not obligatory to rent through an agent; indeed, many “reluctant landlords” (owner-occupiers letting out former homes which have failed to sell) try to bypass agents altogether. Not using an agent will reduce your up-front costs but this could be a false economy. An agency service charge, for example, might include help in an emergency – eg providing a spare key to someone when someone locks themselves out, or dealing with a sudden ingress of water either through a burst pipe or leaking taps from the flat above.

3 Agency costs

Before renting through a letting agent, a would-be tenant will usually have to provide employer references and details of a bank current account. Once you’ve been approved you will usually have to pay a returnable deposit equal to up to two months’ rent. Until now, tenants have often been charged a one-off fee to cover the cost of ancillary services such as checking references and bank details and taking inventories. However, from 30 November agents in Scotland will no longer be entitled to charge.

4 Who is the landlord?

Carry out some level of due diligence on the person letting out the property, otherwise you may find yourself having to pack up and move on after just six months. For example, find out if the landlord is a former owner-occupier, reluctantly letting out and hoping to find a buyer at the earliest opportunity; or is it someone who currently lives abroad but intends to regain occupancy (as soon as the lease permits) on his or her return to this country.

5 Furnished or unfurnished?

With renting becoming a longer-term option among singles and couples more properties are advertised unfurnished. As the squeeze on mortgage deposits leads to people seeking longer leases, or extending existing short tenancies, there is a growing desire to “personalise” surroundings – in effect, make the rented property more of a home by furnishing it to their own specifications. The cost of renting an unfurnished property is now only marginally lower than renting a furnished one.

6 HMO

This acronym stands for “houses in multiple occupancy” and means that no more than two people who are unrelated can share a house or flat that does not have an HMO certificate. To obtain this certificate a landlord has to prove that additional safety requirements (particularly related to fire) have been met so any group of three or more renting together and not using an agent should insist on seeing that such a certificate is in place.

7 Restrictions

Few landlords permit tenants to keep pets and even before the smoking ban was introduced most rented houses and flats were declared smoke-free. Smoking in one’s rented apartment does not break the criminal law but will contravene the lease agreement and could lead to a whole or partial loss of the deposit.

8 Tenant rights

Apart from the points above, a tenant who adheres to the conditions of a bona fide lease is free to live as if he or she owned the property. The tenant has “prior rights” of access, meaning that the owner simply cannot “call in” on a whim..

9 Tenant responsibilities

The rules are simple. Pay rent on time. Take care with furniture and furnishings. Don’t play music or listen to television at an excessively high volume. Generally respect your neighbours’ right to peace and quiet. Ensure the property is clean on leaving.

10 Longer-term renting

A landlord will always strive to retain a “good” tenant and may be prepared to negotiate on the rent in return for a long lease agreement, where the longer someone stays the cheaper a property becomes to rent, pro rata.