Rent Affordability

How much rent can you afford?

Renting is a significant financial responsibility, and it’s important you understand this goes beyond just your rent payments. There are a lot of other costs you need to think about.

Estimate the cost of your rent plus bills

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

There might be a lot of other bills you might be expected to pay as a tenant.

Your landlord might be paying for some of these directly and charging you through the rent. So, it’s also important you understand what bills you’re responsible for paying.

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 in Wales)

  • Gas and electricity bills (either by a pre-payment meter, monthly by Direct debit)

Other monthly costs affecting how much rent you can afford

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

  • A TV licence (paid monthly or annually – visit 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 your costs

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.

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 and removal fees.

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. If you have a private tenancy and have paid a deposit to your landlord (or agent), by law it must be protected in a government approved scheme.

In England and Wales, refundable tenancy deposits are capped at no more than five weeks’ rent for assured-shorthold tenancies if the rent is less than £50,000 a year, and six weeks’ rent if the rent is more than £50,000 a year.

In Wales, you can find out more about the tenancy deposit protection scheme on the Shelter Cymru website

This money will be held in a deposit protection scheme and, if there’s 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 help you.

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

Removal or storage fees -Get local estimates for these.

You might 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.

Rent Affordability Calculator

You should use a rent affordability calculator to identify how much of your income is spent on rent. The rent affordability calculator also lets landlords determine how affordable the rent is for a prospective tenant to guide tenants as well as landlords.

Monthly Rent

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