New year, new home. If only it was that easy. Renting a property for the first time can be quite intimidating with contracts, checks, and laws made even more complicated with the use of rental phrases and words that you may not be familiar with.
We are here to help and have highlighted some of the most used rental jargon to explain exactly what is meant so you don’t have to worry!
1. Assured Shorthold Tenancy (AST)
The most common form of tenancy is an AST if you rent from a private landlord or letting agent. They are typically given for six months but can be for longer. After this initial agreed period, the landlord can serve the tenant notice without a legal reason. They must however follow the correct procedure to do this..
Click here for more info on AST’s.
2. Arrears
Arrears is the financial and legal term for overdue rent payment. When a tenant owes unpaid rent to the landlord, the rent account is said to be in rental arrears until the renter makes up the missed rent and brings the account current.
3. Break clause
A break clause in a tenancy agreement gives the landlord or tenant the right to end a fixed-term tenancy before the expiry of the fixed term period. Usually, the clause can be found to allow an early break of the tenancy 6 months before the end of the tenancy agreement, commonly with a 2-month notice period.
To note, not all tenancy agreements have a break clause, some require the term to be served in full.
4. Buy to let (BTL)
A buy-to-let is a property that is purchased specifically to rent out to tenants to produce a rental return and income stream.
5. Credit score
Also known as credit rating, this is a three-digit number that reflects how reliable you are when it comes to repaying money. Your credit score is based on how you’ve handled your money in the past. The higher your score, the better your chances of being accepted for credit and receiving the best rates.
To note, there is no minimum rating required to rent property in the UK. Ultimately it is up to the landlord to decide if you will be a reliable tenant.
6. Dilapidations
When a tenancy ends, the letting agent will assess the damages and repairs or replacements needed at the property. Dilapidations are the cost of restoring the property to its original state, and the costs may come out of the tenant’s deposit.
7. Guarantor
Aguarantor is a third party who ‘guarantees’ a loan, mortgage, or rental agreement. This means they agree to repay the total amount owed if the borrower or renter can’t pay what they owe. By guaranteeing the agreement, they become responsible for any arrears that occur.
8. Notice period
This is how far in advance a landlord or tenant must notify the other party that they wish to end the tenancy. It normally ranges from 1 to 2 months.
9. Right to rent
When renting a property, tenants must prove that they have the right to rent in the UK. Tenants need to be British or Irish citizens or have permission to be in the UK to have the right to rent.
Click here for more info on Right to Renting in the UK.
10. Section 8/21 notice
These notices are paperwork that landlords must supply to tenants when evicting them. Section 8 notices are used when a tenant has broken the terms of their tenancy, whereas a Section 21 notice can be used without reason as long as there is no fixed term in place.