Unfortunately, that's not really an option for me as I'm a bloody foreigner living in the UK. We don't have any family here who could act as a guarantor and while I know a few people, they have been made redundant like me!
This said, I do have a large wad of cash available to me which is one of the reasons why I'm not in a hurry of finding another job. That might convince a Landlord.
Ah well that's not gonna happen, that's for sure. I have no driving licence! ;-) But I have to say that those new 20" LCDs sure look attractive.
Thank you for the link to your website which I found helpful. What I meant is that offering 6 months advance rent is a little bit too much. I don't see myself as a major risk due to my financial position. If I was to be asked for 6 months in advance, I would expect a discount at the very least.
Unfortunately my contract mentions this specifically. No interests will be paid. Another thing that bothers me about deposits in the UK is that the Landlord or the agency has too much leeway in taking fees before returning the money to you because at the end of the day, he/she's got your money and what are you going to do about it?
I think that's the real problem in the UK. Landlords have way too much power. If you complain there is the risk of a bad reference, even if you're right.
I have no doubts that most of the Landlords who post in this group are decent and reasonable persons, but I get the impression the vast majority out there are just are your average scumbag who's heard on tv that properties are hot and wants to make a quick buck.
My contract is unfortunately an assured shorthold tenancy and we signed it a year ago, so he doesn't have to give us a reason for wanting us out. He did serve us the wrong termination date though. I think he's aware of it because in an attached letter he just said that because of changing policies in his company, he required possession at that date. So in theory, until he serves us the correct date or we come to an agreement, I can stay in this house. I'm sure tempted to piss him off in any way I can.
As an aside, the situation has changed a little bit in that we noticed that a property we were dreaming about living in since we arrived in Reading is available and the rent is actually cheaper that my actual, so it might actually turn out to be at our advantage. But how much do you want to bet that we'll be looking for another house in a year, either because the Landlord is selling or because he doesn't do any repairs or like in this case, for no apparent reason? It would only be the sixth time in six years after all.
Come off it. This would be thrown out by "de minimis" rules. Typically a deposit would be a month's rent. Where a landlord increases the rent by approximately inflation, noone's going to look too closely whether it's going up by 2.3% or 2.6%. That difference is *more* than the interest which would be earned on a month's rent. In other words, any "stealth" rent charged by not compensating the tenant for loss of interest on his deposit is negligible, and it's more practicable all round if it's simply tacitly assumed that in lieu of interest being paid on the deposit, the rent is just (say) a quarter of a percent lower than it would otherwise be.
Interestingly, even using a prevailing interest rate of 5% per year would only give rise to a discount of **1%** off a pre-payment of 6 months rent (ie if 5.94 times one month's payment were placed in a bank a/c providing
5% interest, then this would be enough to withdraw 1.00 now, 1.00 in a month's time, ... and finally 1.00 in five month's time leaving exactly 0.00 in the bank a/c at the end).
How much discount were you expecting - much more than 1% off ?? :-(
5% is the discount I had in mind and I don't think it is an outrageous discount. From my point of view, there would be much more risks on my side than on the Landlord's side so it is only fair that I get a discount for it.
Why? I would have thought that a guarantee of 2 years rent rather than 6 months would be pretty good, assuming you can still reposess for non-payment or damage to the property.
Remember you're already getting something for it: The fact that the landlord is prepared to have you at all. It rather depends on the market. If the landlord could easily find another tenant who does not demand a discount, then why shouldn't he show you the door?
I would have to disagree. I'm not really getting anything. While not a bigger risk than somebody who has a job and might be made redundant with terms less favourable than the ones I've had, I have to surrender free usage of my money for a service that I won't be using in a while.
When you buy a subbscription service, you get a discount if you go for longer terms instead of monthly. The same applies here. Renting is a service.
This said, I am not against paying a six months in advance. If I could have some form of commitment for say 2 years or more, than maybe yes, I would feel that I'm getting something in exchange.
I am not looking for a risk free return. I am looking to pay a fair price for the service that I want to acquire. The Landlord is free to refuse, but I have to question how many people would agree to pay 6 months in advance without asking a sizable discount. Would you?
The risk that he won't be coming to take care of his property because he's already got my money would be one.
The standard AST has a "guaranteed" term of 6 months anyway - only unless
*both* landlord & tenant agree to stopping before this. Assuming the landlord would wish the contract to run to at least the 6 months guaranteed by the AST, then you will necessarily need to pay 6 months rent - whether it is all up-front or spread over the next 6 months.
Hence the "normal" rate of rent quoted will already allow for the fact that at least 6 months rent will be required, and hence : there is no reason to believe that a "sizable discount" is required to pay up-front; simply a compensation for loss of interest should suffice.
"Pollux" wrote
That risk is no worse than the risk the landlord has that you might trash his(/her) property ...
If i trash you house, ultimately I am liable for the damages caused. If after renting your house, I discover that there is drift in the house and you refuse to fix the problem, all I can do is give you notice and leave, taking into account that you have my initial deposit + my six months.
You may be right. It depends on the landlord's motives for being a landlord. If he's in the business long-term, he might indeed welcome the virtual guarantee of a long let uninterrupted by voids.
If he's a medium-term investor, he might be keen to keep his options open, and would not wish to constrain his ability to cash in while the going is good.
If it makes the difference between him accepting you as a tenant, and not, then you *are* getting something. In practice, 3 months would probably suffice.
You may not think yourself a big risk, but the landlord might. Even if you prove to hime that you have the cash in the bank, there is no guarantee to him that you won't spend it on something else. Giving it (or some of it) to him for safe keeping is the only way.
You're not surrendering free usage, because you are committing to the expenditure in any case. So at worst you'd be losing interest.
The difference here is trust. Legally, when taking on a new AST you are committing to a minimum 6 month term. If you stop paying halfway through, the landlord can sue. Payment in advance just saves him the trouble.
Fairness doesn't really come into it. You are negotiating with the landlord; you can perfectly well ask for a discount if you want, but the landlord is free to refuse. As other people have said I think in practice any landlord is likely to refuse a 5% discount unless you're the only prospective tenant.
Even if you do want to sell it isn't obvious that having a sitting tenant is an obstacle to selling, it may be considered an advantage.
Also I think there's a wider point. Traditionally, tenants have tended to be young, single and fairly rootless, so the structure of leases and the kind of property available (mainly one and two bedroom flats) is geared to that market. With the increase in house prices there is potentially a much greater demand for family homes to rent. However, if you have a family you probably want something bigger than a 2-bedroom flat and a lease with more than 2 months security. ISTM there is a gap in the market for landlords offering to fill that need.
"Traditionally" the rental market was aimed at families, and single people went into lodgings. The private rental market was destroyed by the security of tenure laws and the impossibility of getting sensible rents. The introduction of Shorthold tenancies began the change back.
Well, yes, it depends how far back your memory goes I guess :) But I don't agree that shorthold tenancies make much difference for families, because the tenure is so restricted. A single person can live with the possibility of being kicked out on two months notice, but for a family that really isn't acceptable except in extremis. Also of course with the exception of a period in the early 90s people have generally been desperate to buy and have only looked at renting as a temporary measure, it will take a culture shift for people to regard renting for many years as normal.
I would agree. I believe (though personally I would benefit enormously from a crash) that the shift is happening.
It would take very little to change British ideas to follow for example the Belgium way with a professional inspection of the property, deposit held in a joint landlord/tenant account and 3 year leases very much the norm.
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