MoneyMagpie Editor and financial expert Vicky Parry shares how you can save up for your next house move with some savvy money tips
Whether you’re moving into your first rented accommodation or to your fifteenth place, the bane of all tenants is finding the rental deposit. That’s because you need to have your deposit ready for when you move, as well as your first month’s rent.
And as it could take weeks to get your old deposit back, you can’t rely on a previous deposit to fund the next one. That means you need to find a couple of thousand pounds to make the move happen – which is extortionate for most people to save up.
These tips will help you save for your rental deposit and show you how to get help if you need to move but can’t get a deposit together.
Know your rights
First of all, make sure you know how much a deposit is likely to cost you. Work out what kind of property you can afford, based on your income and regular expenses. When you know the top level of rent you can pay, it’s easy to work backwards to know how much you need for a deposit.
That’s because the maximum you can be charged is five weeks’ worth of your rent. So, if you can afford £1,000 a month in rent, that’s £250 a week. The maximum deposit you can be charged is £1,250. It is helpful to know this sum, to find out if landlords are trying to overcharge (and if they are, run away! It’s the first red flag that your tenant rights won’t be respected).
If your current landlord has not put your deposit into a Deposit Protection Scheme, you’re in luck (stick with us on this). You can take them to court for the full amount plus damages – up to three times the value of the original deposit. Court can take a while but is does NOT have to cost you anything if you have a valid claim, as there are specialist solicitor services like Tenant Angels who will manage the process for you and claim their fees from the landlord.
Sell your clutter
Selling your unwanted items is a little bit of a faff but could easily raise some much-needed cash when you’re moving. More than that, it’ll help you clear stuff that you don’t want or use, to save you from lugging it to the next house!
Try to tackle clearing out your clutter in small stages, to make it feel less overwhelming. If you have time, spend a day each weekend on a room in your house to sort out. Then, attend a car boot sale or spend a few evenings taking photos and listing things online. You can sell almost anything online with sites like eBay, Vinted, and NextDoor.
Consider zero deposit company
If you can’t raise a deposit in time, there are zero deposit companies available. There are costs associated with them but they can be helpful if you’re in a bind and need to move.
A zero deposit company is a private company that acts as a guarantor or insurance on your tenancy. You will usually pay a premium monthly for the service, instead of paying the deposit – making your monthly outgoings higher – and you don’t get your deposit back at the end of the tenancy.
Zero deposit companies can charge some extra fees, such as if the landlord wants to claim for cleaning services on your property via them. There are alternatives (see below) to try first. A letting agency cannot force you to use a zero deposit company.
Ask somebody to be your guarantor
If you know you can afford all of your rent every month, and won’t default on payments, you could ask a friend or family member to be your guarantor. This is a person who signs an agreement saying they will pay your rent if you fail to do so – which is why you should only do this arrangement if you know you will be able to afford the rent. Otherwise, you’re putting your guarantor on the hook for it.
Speak to your local council
There are several private and local authority schemes to help with rent deposits. Crisis has a database of private schemes you could apply to, if you meet the eligibility criteria.
Your council may also be able to offer help. If you are in receipt of either Universal Credit Housing Element or Housing Benefit, you could apply for a Discretionary Housing Payment to help raise funds for your deposit and/or first month of rent.
If you don’t qualify for a DHP, you might still be eligible for another type of council scheme. There are often rent deposit, guarantee, or bond schemes to help you, which might be a non-repayable grant or an interest-free loan that is paid in small affordable amounts.
At the end of your tenancy, if the landlord keeps your deposit because you didn’t pay all the rent or caused damage to the property, you may be required to pay back the money even if it was a grant.
Apply for a budgeting advance
If you receive benefits such as Universal Credit, you could be entitled to apply for an advance on your payments to use for your deposit.
Think very carefully about doing this, however. That’s because it will be paid back through monthly amounts taken from your benefit payments. So, if you can’t afford to reduce your benefit income, it may not be the best solution.
Find ways to make a side income
Taking a temporary second job is an option for people who are able to find the work and manage it around their health, commitments, and other work. However, there are other ways to make a side income.
You could set up as a freelancer if you have skills other people want, such as graphic design or copywriting or website development. Or, you could earn extra cash by switching current accounts to make the most of a cash incentive offer like First Direct or Nationwide’s £175 switch offer.
You could also make money online with surveys and market research, which won’t add up to loads of cash but it can be done in a few minutes each day and could help contribute to your moving fund.
Save your previous deposit immediately
When you get your last deposit paid back, don’t be tempted to spend it. Instead, find a high-interest savings account and lock it away for the length of your tenancy. This means you’ll have it ready for the next time you need to move, and it will have earned you interest in the meantime.
Try to squirrel away a small amount each month into the savings account on top, too – even £25 a month is an extra £300 a year saved. That will help cover your moving costs the next time you move, so it won’t feel quite such a hefty blow on your bank account.
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