How to reduce your rent
Save money on your rent – a worked example.
If you live in rented accommodation it may be possible to get your rent reduced.
There is little scope for rent reduction if you live in social housing – such as local authority housing. After all rents for council housing are substantially lower than comparable properties within the rental sector.
You can claim housing benefit if you rent from a private landlord or the local authority. What you get will depend on:
- If you live in social or local authority housing the number of unoccupied bedrooms will affect your benefit entitlement – the so called ‘bedroom tax’.
- The eligible or reasonable rent for the area you live in.
- Your income.
- If you pay any service charges.
- Your personal circumstances; such as age, disability and the number of people occupying the property.
If you live in private rented accommodation you’re housing benefit will depend on:
- The Local Housing Allowance Limit for your area.
- Your personal circumstances.
- Your income.
- The amount you get will depend on the number of bedrooms your property possesses.
- In order to claim housing benefit you must be:
- on a low income, paying rent and/or claiming certain benefits such as Employment and Support Allowance, Income Support and Jobseekers Allowance. Claim through your local Jobcentre.
- If you are claiming Pension Credits claim through the Pension Service.
- If you are claiming other benefits contact your local authority.
- You cannot claim if your personal savings exceed £16000.
- You can apply if you are employed on a low wage or if you are unemployed.
- If you live with a partner only one of you can claim housing benefit.
- If you wish to appeal a housing benefit decision contact your local council Housing Department.
The government publishes a useful guide, see www.gov.uk/housing-benefit.
Claiming housing benefit is all well and good if you are on a low income, but if you simply want to reduce you’re housing expenditure what can you do?
This procedure would normally only be applicable to the private rental sector.
As in so many financial situations the better your credit history the better your chance of a good deal. A landlord may be reluctant to get rid of a good tenant, but he may well be relieved to get rid of a bad one! Because of the shortage of affordable properties to purchase and the higher deposit required to secure these properties more and more people are being forced into the rental sector, inevitably pushing up the price of rental property
So how do you reduce your rent?
The first step is to mention to your landlord that although you can meet your rent commitments at the moment you are finding it increasingly difficult to meet your financial obligations and may be forced to look for cheaper accommodation in the near future. Just mention it in passing and if you can justify that statement, do so. Wage freeze, increase in utility bills, car repairs can all put pressure on our budgets and more importantly cash flow. Do not make a big deal of it, just introduce the idea.
Next research the local rental market to compare and contrast your property with similar properties in the area. Make a note of the local amenities such as schools, shopping centers, cinema’s and transport facilities. If you find any properties that seem particularly good bargains make a note of them. Ask yourself why they compare so favorably against your own accommodation.
Just Google ‘property to let’ in your area. Try to ascertain if the letting market is buoyant or stagnant in your area and why.
If the letting market is slow in your area you have a better chance of getting your rent reduced than if the market was vibrant and your landlord could easily find another tenant. Empty properties cost your landlord both time and money. They may well be prepared to forgo a little profit to retain a good tenant.
Make a shortlist of desirable features that you are looking for in alternative properties and rank them in order of importance. Look for the cheapest rental property or properties that meet your essential criteria. Seek further information on these properties and compare and contrast them to your current property.
Set up a meeting between your landlord and yourself. Explain that although you do not wish to terminate your tenancy you feel that your options are limited due to rising expenditure. Let your landlord know that you are actively looking for alternative accommodation. Mention any particular properties that you feel compare favorably with your current property.
Do not be confrontational; adopt a friendly, helpful approach. If you have reasons for believing the property is overpriced point this out, again maintaining a helpful and polite approach. Emphasize that you do not wish to move but feel you no option given your current economic position. Do not get into a confrontational situation and do not under any circumstances verbally state that you are definitely terminating your rental agreement. Point out that you are looking at your options and would value the advice of the landlord.
The landlord may suggest lowering or freezing your rent. They may suggest other alternatives such as carrying out repairs or relocating you to another cheaper property that they own. Thank them and state that you will consider your options and get back to them. Do this even if your landlord offers to lower your rent.
Now think carefully, is the landlord’s offer attractive enough to accept. If no offer was made do you wish to remain in the property or would you consider relocating. This is where your previous survey of the market will come in useful. Weigh up the pros and cons of relocating, taking into account any exit fees. If you are genuinely struggling to pay your rent moving may be your only option. Either way you get cheaper rent.
Let me take you through an actual example.
John G is a self-employed joiner, specializing in bespoke kitchen installation. His wife Jean works part-time at a local school in Ashby-de-la-Zouch, Leicestershire. They have two children, both girls, who attend the school where their mother works.
Due to the downturn John fell behind with his mortgage and was forced to sell his old property and now rents a 3 bedroom detached property in the village of Packington, just over a mile from Ashby town center. The house has a secure garden, full central heating and a garage. The rental on the property is £775 a month.
John is concerned that the continuing downturn and uncertainty regarding his wife’s employment may result in a significant further reduction in the family income. Having experienced one adverse situation resulting in mortgage arrears he wishes to avoid a similar situation regarding his rent. Following a family discussion they decide to reduce their expenditure by attempting to reduce their rent or relocating to a cheaper property.
John rents the property through a local letting agency. He calls in to see them and informs them that he may have to relocate in the near future and apprises them of his financial situation. The agency staff are sympathetic and helpful and suggest that should he require any assistance in finding another property they will do all that they can to assist him.
John takes back some property information from the agency. Then, in consultation with Jean, makes a short list of features that they consider desirable in a new property.
The list includes:
- 3 bedrooms, (John currently uses one bedroom as an office, so they could compromise with 2 large bedrooms).
- Large secure garden for the children.
- Garage, (John’s car was stolen from the drive in his last property).
- Full central heating.
- Within easy commuting distance and within the catchment area for the local school.
- Per month rental of £650 or less.
A web search for suitable properties, using Rightmove, lists sixty-eight 2 to 3 bedroom properties for rent within the Ashby area. However, only 5 of the above meet the family’s requirements. John prints the details from his computer and narrows the search down to just 3 properties.
The next day John receives a telephone call from Mr Jones, the owner of their current property. Mr Jones has been informed by the letting agency that Mr G is considering relinquishing his tenancy. After a brief discussion John and Mr Jones agree to meet at John’s house to discuss the matter.
The family and Mr Jones meet the next day. Mr Jones states that although John has made several late payments over the 4-year tenancy, Mr Jones considers the family to be good tenants and complements the family on the upkeep of the property. John explains his current financial predicament and emphasizes that the family is very happy and satisfied with the current property but with an uncertain financial future the prospect of incurring debt on the property is not an option they wish to contemplate. He shows Mr Jones the details of the best 2 options he has sourced from the internet.
Mr Jones is sympathetic and empathetic to John’s position. He asks John what price range he is considering and what he is looking for in an alternative property. He then informs John that he has a property in Ashby that meets John’s criteria. It is coming onto the market within the next few weeks, would the family be interested in viewing the property? John states that they would be happy to view the property but must keep their options open for the moment.
The next week Mr Jones arranges for the family to inspect the property. The house is a three bedroom semi-detached property just over half a mile from their current location and within 0.7 miles of the local school. It is located in a quiet residential estate and possesses a garage and large secure rear garden. The rental is £560 per calendar month and the deposit required is £650.
The family like the property and when Mr Jones states that although the property is semi-detached the neighbors are a pleasant elderly couple who adore children. Furthermore, Mr Jones states that because they are exchanging one rental property for another no deposit will be required. Further he suggests that they could rent a box van and with the aid of a couple of handy men move house very cheaply.
John thanks Mr Jones and says that he will let him know of their decision within three days. The family discuss the matter and compare and contrast the properties. The family believes that one of the properties they looked at earlier represents slightly better value for money than Mr Jones property. However, the kindness and helpfulness that Mr Jones has shown them plus the ease of moving properties swings the balance and they take up the offer on the property shown to them by Mr Jones.
Everyone is happy. The family know they have a good landlord and the landlord a good tenant, and they are better off by £215 a month.
It is better to move properties than to get into debt. Debt will adversely affect your credit rating and may prevent or make it more difficult and expensive to rent, mortgage or obtain finance in the future. Always inform your creditors if you are finding it difficult to pay your way, obtain impartial advice and work with your creditors to resolve the situation.
I hope you have found this post helpful.
Let us know how you get on.
All the very best.
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