The decision to start renting a flat is a big one, but also a very important one. You will not only have the freedom to look and move anywhere in the country, but you can also leave at the drop of a hat without being landed with the hefty fees that comes with buying and selling a house. The other advantage of renting is that if anything goes wrong with the flat then all you have to do is ring your landlord and they will send someone to fix it for you, avoiding any hefty costs. However, even if you rent there are still bills to pay and you need to take them all into account when deciding on the flat that you can afford to pay for.
This is the most obvious cost each month, but must be considered carefully as it will no doubt be the biggest. The most important thing to remember is not to over exert yourself – opt for properties slightly below your budget rather than one that’s above, as this will leave you with very little leeway if your situation changes. You may also decide that the extras, such as TV, broadband, mobile phones etc. are important to you as well, so remember to assign some budget to them.
Whilst you may not own the flat, you will be the one living in it and using the local amenities and so you will be the one who has to pay for the council tax. You must check what council tax band that the property you plan to rent is in, as it will add between £845 and £2,500 to your yearly bill. Payment is usually made monthly, with a variety of payment options, but you must check that you and any housemates can afford it before committing to a property.
Another monthly expense that you must budget for is energy, namely gas, electricity and water. Bills will obviously vary a lot depending on the size of the house you choose, and will also depend on the area that you live in. Those with South West Water had some of the highest bills in 2011-12, at an average of £493 for the year, whereas Severn Trent customers paid just £298 on average. The best thing to do is to compare energy prices to get the best deals.
There are also other expenses that will vary as they are more optional. Many people can no longer survive without broadband, which can cost as little as £5 a month but as much as £60, depending on what package you choose. You will also need a landline, which cost about £10 a month, and you may have to pay to get it reconnected but you can haggle with your chosen provider for this. You should also seriously consider getting home contents insurance to protect your valuable possessions.