The Costs of Renting: What to Budget For

When you’re renting a home, it’s easy to focus solely on the monthly rent. But rent is just one part of the picture. To avoid financial stress, it’s important to understand all the costs involved in renting and plan your budget accordingly.

Whether you’re renting for the first time or moving to a new property, knowing what to expect helps you stay in control and avoid unwelcome surprises.

Monthly Rent

Your rent will usually be your biggest outgoing. It’s typically paid monthly in advance and should be clearly stated in your tenancy agreement.

When budgeting, be realistic. Here in South West London, the average monthly rent as of June 2026 comes in at £2,061 per calendar month – but that does not mean it needs to be a target. Budget sensibly. Financial advisers often suggest keeping rent to around 30–35% of your income, if possible, so you have enough left for other living costs. In fact, referencing essentially dictates this also – your income should be no less than 2.5 to 3 times annual rent; the maths works out at roughly the same.

And not all areas we cover in South West London are the same. £2,061 is the average, but as you might expect, that changes area by area. In Tooting, it is almost exactly that figure, at £2,063 per month, but head up the road to Streatham, it is £1,816 per month. Now try Wimbledon… £2,645.

Talk to us about your income, your budget and your requirements – we can help you understand which locations work best for you.

Deposit

In England, deposits are capped at five weeks’ rent. This is held in a government-approved tenancy deposit scheme and returned at the end of the tenancy, provided the property is left in good condition and rent is paid in full.

While the deposit isn’t a permanent cost, it’s a significant upfront expense to plan for.

First Month’s Rent in Advance

Most landlords require the first month’s rent upfront before you move in. This means you’ll usually need to pay both the deposit and the first month’s rent before collecting the keys.

If you’re self-employed or new to the UK, be careful if you are asked for several months’ rent in advance. This is prohibited under Renters’ Rights Act 2026 legislation, and would only be allowed if prior to the phase 1 implementation date on May 1, 2026.

They may be asking due to ignorance of the law, but it is the law nevertheless.

Council Tax

Council tax is usually the tenant’s responsibility, although it might differ in Houses in Multiple Occupation (HMO).

The amount depends on:

The property’s council tax band.
The local authority.
Whether you’re entitled to any discounts (such as single-person discount or student discount).

Check council tax bands when you are viewing – they can vary significantly between properties, even though they may look the same on paper.

Utilities and Household Bills

Tenants typically pay for:

Gas and electricity.
Water.
Broadband and TV services.

Ask the letting agent or landlord for average costs if you’re unsure, especially for larger properties or older homes with lower energy efficiency.

In HMO properties, the rent amount may cover these things – and may also include regular cleaning (although check if cleaning extends to your bedroom, or if it is just common areas).

TV Licence

If you watch or stream live TV or watch previously live programmes on catch-up, and/or if you use BBC iPlayer to watch any content, you will need a TV licence. This applies whether you watch on a television, laptop, tablet, or phone.

Moving Costs

Moving itself can come with extra expenses, such as:

Van hire or removal company fees.
Packing materials.
Storage costs if there’s a gap between tenancies.

When you move out, you may need to or perhaps feel you should choose to engage a professional cleaning service. These costs are easy to overlook but worth factoring in.

Insurance

Landlords insure the building, but tenants are responsible for their own belongings. Contents insurance is optional but recommended to protect your possessions against theft, fire, or damage.

Final Thoughts

Renting involves more than just paying rent each month. Deposits, council tax, utilities, and moving costs all add up, and budgeting for them in advance makes renting far less stressful.

If you’re unsure about the costs of a particular property, ask questions early. A good letting agent will be happy to explain what’s included and what you’ll need to budget for separately – and it can actually reassure the agent that you are taking matters more seriously.

Frequently Asked Questions

What upfront costs do I need to rent a property?

Typically a deposit (up to five weeks’ rent) and the first month’s rent in advance, but you may also need to budget moving costs and consider cost for utilities which may be due in the first month.

Do tenants pay council tax?

Yes, in most cases. Some discounts may apply depending on your circumstances, for example single persons (25%, apply to council) or students (100% discount, provided your course lasts at least 12 months, involves a minimum of 21 hours of study per week, and that you live in a property where everyone is a student (mixed households receive a discount of 25%))

Are there any fees for tenants?

Since the Tenant Fees Act, most tenant fees are banned in England. Only limited charges (such as late rent fees) are permitted, along with certain capped fees such as to call the letting agent out if you lose or misplace your key (this is at the agent’s discretion. There is no legal obligation to come out, and you may be directed to a locksmith).

Do I need contents insurance?

It’s not mandatory, but it’s strongly recommended to protect your belongings.

Can rent increase during a tenancy?

Yes, rent can be increased, but it must be in line with market prices. It can only be done once a year, under Renters’ Rights Act 2026 legislation.