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Managing my money for young adults
Managing my money for young adults

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2 Deposit and rent

This image shows a row of terraced houses. Three pound signs are across the image.
Figure 1

So you’ve found the property that you and your future housemates are happy with.

What happens next is that you will need to get on top of the financial obligations of the tenancy.

The first thing that you will normally need to provide, upfront, is a deposit to secure the accommodation. You need to have the money available for this. You might also be asked to supply references.

Under the Tenant Fees Act (Gov.UK, 2019) the only other fees and charges you may have to pay, besides the rent and the deposit, are:

  • for the late payment of rent
  • for replacing lost keys
  • for changes to the terms of the tenancy (e.g. adding a new tenant).

Your deposit might not be returned to you in full at the end of the tenancy if your landlord has grounds to make deductions. It will depend on how you and your housemates have looked after the property. When you’re placing the deposit make sure you know the reasons why deductions could be legitimately made by the landlord. Deposits are typically a few hundred pounds per tenant.

There should be an inventory describing the property, its state of repair, the functioning of appliances and any furnishings. When you pay your deposit take the opportunity to advise the landlord of any issues you spotted when you visited the property that need to be sorted out (repairs and decoration, for example). You should also ask for new appliances or furniture to be provided if your checklist has identified these needs. Remember to check if these matters have been addressed by the time you move in, and if they have not been fixed let the landlord know immediately.

You should also ensure that your landlord protects your deposit by registering it under the tenancy deposit protection [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] (TDP) scheme. Your landlord is legally required to do this within 30 days of your payment of the deposit.

By the time you pay your deposit you will have confirmed not only the rental cost per tenant but the dates when rent has to be paid. Commonly rentals are paid quarterly (at the start of each quarter), but you might get a deal where the rent can be paid monthly.

Most student rentals run from the start of July to the end of the following June. So you will have to be able to put up typically a full quarter’s rent for your property by the start of July. Paying rent for the summer vacation period when you’re back at the family home or on holiday will feel like a waste of money – but that’s the reality of student lets; they run July to June not September to June.

Once you’ve found the property and secured it by each paying a deposit, you enter into the tenancy agreement, which you’ll explore in the next section.

Activity 2  Early budgeting challenges

Timing: Allow about 5 minutes

What budgeting problems can arise from the early financial costs of a property rental (deposit and first quarter’s rent)?

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Feedback

The problem is that you’re having to start paying bills for accommodation for next year before you’ve finished the current academic year, and before the income for next year (your maintenance loan) has arrived. This can put a strain on finances. You’ll need to ensure, for example, that you have the money for the deposit and the first quarter’s rent. It’s likely that this will be the first time you’ve experienced a need to manage money in this way.