How much rent can you afford?

To see how much rent you can afford, you first need to add up all of your other expenses. Read on for an overview of the upfront and ongoing costs you need to consider before deciding whether or not you can afford the rent.

Estimate the cost of your rent plus bills

Renting a home involves more than just being able to pay your rent.

Here’s a list of the most common bills you should expect to pay as a tenant.

Council Tax, utilities and service charges

  • Water bills (usually paid monthly)
  • Service charges (in some properties – paid monthly or annually)
  • Council Tax (usually paid monthly - England, Scotland and Wales) or rates bill (N.I)
  • Gas and electricity bills (either by a pre-payment meter, monthly by Direct debit)

Ask the agency, landlord or previous tenant to give you estimates for these bills when you have a look around the property.

Use the links below to check Council Tax and rates bands for specific addresses:

Other monthly costs affecting how much rent you can afford

Bear in mind you will probably have extra monthly bills to pay, such as:

  • A TV licence (paid monthly or annually – visit tvlicensing.co.uk to find out how much this costs)
  • Landline phone bill (plus any connection charges – can be paid quarterly or monthly)
  • Contents insurance (paid monthly or annually)
  • Digital TV or satellite TV subscriptions (paid monthly)
  • Broadband bill (paid monthly or quarterly)

Draw up a budget of all of your costs

Use our Budget planner to get a detailed breakdown of your spending.

You should also try to make a realistic estimate of what you’ll spend each month on other day-to-day expenses such as:

  • Mobile phone
  • Food/clothes
  • Travel/car insurance
  • Childcare/maintenance
  • Gym/hobbies/nights out
  • Loans or credit card repayments

If in doubt, over-estimate rather than under-estimate.

You don’t want to risk getting into debt after a few months because you forgot to factor in one of your regular monthly payments.

Once you have estimates for each of these items, you can draw up a budget so you can calculate how much rent you can afford.

This will show you exactly how much money you have coming in each month and how much you have going out in expenses.

Then you’ll have peace of mind you will have enough money to live on, once you have paid your rent.

Remember to divide an annual expense - such as paying for Christmas or a summer holiday – by 12, so the cost is split evenly across the year.

If the figures are looking tight, visit our smart shopping page to get expert advice about saving money on bills at home and when out and about.
Watch our Managing money video to find out the best way to keep on top of your money and manage your finances.

Don’t forget the upfront costs

Before you sign the tenancy agreement, you’ll need to make sure you can afford to pay the costs of moving into the property.

Rental deposit

Upfront costs

Remember to budget for up-front costs such as rental deposit, agency fees and removal fees.

Rental deposit

Your deposit is likely to be the biggest expense if you’re renting a new place, so make sure you have these funds before you commit yourself.

From June 2019, refundable tenancy deposits are capped at no more than five weeks’ rent if the rent is less than £50,000 a year, and six weeks’ rent if the rent is more than £50,000 a year.

Find out more about what you can and can’t be charged for when renting by landlords and agents on Gov.uk .

This money will be held in a deposit protection scheme and, if there is no damage, you should get it back when you move out.

If you don’t have the money for a deposit, ask your local council to find out whether there are rent deposit, bond or rent-guarantee schemes in your area to can help you.

But bear in mind not all landlords and lettings agents will accept deposits in this form – you’ll need to ask.

Agency fees

Tip

Compare agency fees early on – for example ask what they will charge you for getting references and drawing up or renewing the tenancy agreement.

From June 2019, letting agents in England will no longer be allowed to charge admin fees for things like checking references, or renewing a tenancy. This could save renters an average of £400.

Letting fees were already banned in Scotland, but are still legal in Wales and Northern Ireland.

For example, charges for checking references range from £10 to £275, while charges for renewing a tenancy range from £12 to £200.

Removal or storage fees

Get local estimates for these.

You can probably save yourself money by hiring a van and doing the job yourself, if you’re up to it!

Furniture or furnishings

If you’re moving to an unfurnished place, don’t forget to budget for the cost of furniture and soft furnishings such as curtains.

More money information if renting

For more money-related information if you’re renting, read our guides:

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