Many of our clients move to London or the UK from somewhere in the United States. While we really are ‘two nations separated by a common language,’ there are a few key differences when it comes to renting (“leasing”) homes in the UK versus the States.
In both countries, people are now looking for homes to rent on the internet initially to get an idea of what’s on the market. Usually, they will find their way to a general property portal (like Rightmove or Zoopla) and sometimes they’ll go direct to a specific estate agency’s site – although that’s happening less and less now.
When looking at estate agents “letting agents” specialise in rentals and are a subset of estate agents in the UK. Compared to realtors in the US, there are a few major differences. But there’s one, overarching difference in particular and it’s this. In the US, one agent has access to ALL the local listings on the market (via the MLS system) whereas in the UK that’s not the case.
A letting agent in the UK can effectively only offer a renter those properties that are actually listed with that agent. In the olden days, individual renters would have to approach every agent separately just to find out what properties are available. In the modern world of online portals, renters can identify suitable homes quickly and easily. But to pursue their interest in any particular homes that take their fancy, they will still have to deal with any number of agents who hold those listings.
When the property portals started to establish their stranglehold on the UK estate agent industry, we thought that they might also make inroads into the relocation/property search business because assignees from overseas would easily be able to find rental homes from the comfort of their sofas. But the fact is, it was too easy!
What assignees do today is they go online and find far too many rental homes that seemingly (operative word!) match their requirements. They find so many that they can’t look into a fraction of them on their own. More important, they need local help and knowledge to weed out the unsuitable ones.
Of course, every ad on an online property has been written by the listing agent. They are all made to sound wonderful! They use misleading photos. The reality is often very different. So the assignees need a local expert, someone who’s on THEIR side, more than ever before to help them separate the wheat from the chaff!
For example, maybe a London flat looks fantastic from the online ad but our local expert knows that it’s right on top of the tube line. The building shakes every time a train runs underneath it. Or maybe (as happened recently) an old photo of the building has been used, when we know that there is scaffolding all around the outside which will be in place for the next 2 years while noisy, dusty construction works are being carried out.
Assignees are busy peeps. They and their employers want them to be able to focus on the work that they’ve been sent to the UK to do. So we encourage them to send us a torrent of emails with links to the homes that they’ve quickly identified on the internet. How often do they end up taking one of those homes? Almost never. But the homes that have caught their eye do give us a valuable insight into what they’re looking for in a rental home.
A bad trend for assignees, propelled by online apps and portals, is the number of shoe string employers who leave their assignees to fend for themselves, instead of providing them with proper home finding support. We see the fallout from this mistake all the time. Unrepresented renters are fodder for unscrupulous landlords and the unregulated, unlicensed UK property industry.
This is why leaving assignees to find their own rental homes in the United Kingdom can be a serious mistake. The UK rental system is frustrating and highly inconsistent, which is why the services of a relocation provider are so valuable to employers and their assignees.
Top Tips for Moves to the UK:
1.There is No Multiple Listing Service
The first step for every rental search is to decide on the right location in which to conduct the search for the perfect home. This is vital as the neighbourhood (or ‘borough’) that you choose can dictate a lot of factors, from the catchment area for the children’s schooling even down to what football team you cheer for!
In the UK, this means having to approach numerous rental ("letting") agents that serve the assignee’s chosen areas to find out what homes are available. Obviously, this task becomes doubly difficult if one specific area for the rental search has not yet been chosen.
There is no multiple listing service (MLS) in the UK. Finding rental homes and deciding on specific locations purely through internet research is very unsatisfactory and can eat up a large chunk of time with little to show for it.
Each individual letting agent can only effectively offer rental properties listed with them. It's, therefore, necessary to approach a considerable number of agents when researching the target market because if you search on one agent’s site you would only see their available listings under your criteria or wish list.
The agent is paid a commission by the landlord and it’s the agent’s duty to represent the landlord solely.
Landlords typically list their properties with several agents on an open agency basis – i.e. only the agent that finds the tenant gets the commission money. This further complicates the search because different agents may be offering a property at different rents and on different terms. They will usually use different photos and descriptions so you won’t necessarily know if you’re looking at the same home or 2 different homes!
2.There is no Agent Licensing
Believe it or not, there are no licensing laws in the UK. There are no compulsory qualification requirements. Pretty much anyone can open up a letting agency without any previous experience.
Therefore, agents cannot be relied upon for advice or honesty. They work for landlords who pay them large commissions. They are not licensed or subject to any regulations and there’s no mandated training. Literally, anyone can open up a rental agency business overnight in the UK! Anything you’re told by a UK rental agent should be taken with a pinch of salt!
This differs to the States where each agent must have a license and goes through extensive training and costs to themselves to obtain this. Internet websites (e.g. Gumtree) are merely marketing tools to attract prospective tenants. More often than not, the properties listed are no longer available.
We’d also recommend avoiding relying on letting agents who claim to offer a "free relocation/home search service." Letting agents represent the interests of the landlord exclusively; so how can they possibly be relied upon to negotiate the best terms for your company and your assignees?
Having dedicated, professional relocation assistance is therefore vital in the UK. A good local relocation expert will know their local market inside out and, most importantly, will know the good agents from the bad agents.
3.The Rental Market is Going Through a Huge Transition
Furthermore, as online agents make more and more inroads into the market the service to renters from agents generally is going from bad to worse. First of all, the online agents often don’t have any actual offices and tend to operate on a call centre approach. The person you speak to on the phone may be hundreds of miles from the rental search area. Secondly, they are competing for landlords’ listings on price alone. This has led to a race to the bottom on fees generally which means that agents generally are finding it hard to provide even the poor level of service to renters that they were once able to provide.
It goes without saying that a letting agent (who works for – and is paid by - the landlord) can never be relied upon to objectively advise a renter - for example, that a particular property isn’t right for them.
There’s no doubt that online agents are becoming increasingly popular in the UK and this trend is highly likely to advance quickly as more and more contenders jump into the ring. Quite apart from dedicated online agents and traditional agents moving to the online model, there are now sites that enable renters and landlords to communicate directly. And the fees they charge are nominal.
Thus, if you’re moving people to the UK from overseas the need for professional rental search support has never been greater than it is now.
Regional markets throughout the UK differ considerably, both in terms of costs and rental practices and procedures. A rental agent in Birmingham or Manchester will have a completely different approach and policies than an agent in Woking, Surrey.
And London is a unique market all by itself. London letting agents operate in a different manner to anywhere else in the UK.
Letting agents’ offices are dotted all over the place in every town and each neighbourhood may have scores of such agencies operating within them. They do not generally cooperate with each other or share listings. Doing all the legwork needed to find suitable rental homes that are available can be a real nightmare without rental search support and access to a local relocation expert.
Effective negotiation of the rent and related provisions can yield substantial savings over the life of the assignment. Assignees should never be left to do this on their own. Assignees get emotionally attached (understandably) to the property that they have chosen which can give the agent an advantage in terms of extracting better terms for their client landlord. We’ve all felt this from personal experience, haven’t we? You fall in love with the perfect flat and are worried that it will get snatched out from under your nose – especially in such a competitive market!
And it’s not just a matter of the size of the monthly rent payment. The terms of the deal can be heavily weighted in the landlord’s favour and against the interests of the renter.
There is no such thing as a standard rental contract (Tenancy Agreement) in the UK. Go to 5 different agents and they’ll each have their own so-called “standard form”. The agent’s standard form will be loaded in favour of the landlord and will contain little to protect the renter. The renter needs to be properly advised on the implications of what they’re being asked to sign-off and educated as to what amendments should be demanded.
Take it from me that, while the paperwork may be presented as standard and non-changeable, in practice the terms are negotiable. We go through every Tenancy Agreement with a fine tooth comb and we negotiate for our clients on a line by line basis.
Most UK rental agents continue to hold renters hostage over the payment of mandatory tenant fees. These fees are in addition to the commission that they charge to their landlord clients.
It is promising that the UK Government has responded to our representations on behalf of renters and now pledged to ban agents from charging fees to renters as soon as they can get a new law on the statute books. These so-called “admin fees”, which were once small, have grown and grown to the point that they can add the better part of £1,000 to a tenant’s initial payment before they are allowed access to their new home.
The Draft Tenants' Fees Bill, outlined in the most recent Queen's Speech, aims to ban landlords and their letting agents from requiring tenants to pay fees (on top of the rent) as a condition of their tenancy. Up until now, letting agents could charge whatever amount of fees they wanted for basic things like referencing or drawing up an agreement.
Until the ban becomes law, we continue to do our best, as part of the negotiations, to minimise such add on fees for our clients.
The UK word for breakages/damages to the landlord’s property. Unfortunately, a lot of UK landlords see this as an opportunity to extort additional money from renters by refusing to return their deposit.
Here again, the tenant can do a lot to protect their position by making certain that the terms of the rental contract are fair and reasonable.
There should be an embedded machinery – that is to say a formula - in the lease agreement setting out how dilapidations will be assessed. The arrangements for inventory check in and check out are important here. The whole process needs to be spelt out clearly in the Tenancy Agreement and should include a timetable for when the deposit is to be paid back.
The lease must say who is responsible for what - for example, plumbing problems, leaks, upkeep of appliances. Some of these issues will be covered by statute, but it is far, far better to spell everything out clearly for the avoidance of costly disputes.
Dilapidations are approached differently in the UK. There’s a formal check-in and checkout inventory process that looks for all scratches, dings and dents to ensure anything that happens during the tenants time in the property is recorded and charged. Tenants are expected to fill in any holes, repaint walls if there are marks or paint removal, etc.
Make sure your assignee captures a photographic record of the state of the home when they move in so that they have a solid evidence of the condition of the property at the outset. Use both video and still photos to record all existing damage, wear and tear.
Don’t forget that if they’ve received permission to update some parts of the flat (perhaps painting a room from pink to blue or updating some curtains or wall hangings) that they’ll most likely need to set it back the way it was before the change.
Sometimes we’ve seen Landlords try to use the deposit to redecorate the home, repaint, etc. before the next tenant moves in. They consider dilapidations (or fake dilapidations!) a profit centre for them to make a little more ££ on the side. They also may not take into consideration fair wear and tear and will try to claim for items at their original, new price instead of at fair market value.
This is an important component of making sure that the rental contract is fair and reasonable from the renter’s perspective. Renters should not be left unrepresented because they will not get it right and the cost implications down the road (which usually fall on the employer) can be substantial. We’ve seen claims from landlords of up to £50,000 that we’ve had to fight on behalf of corporate clients.
8.Start of Tenancy and Rent Due Dates
The most common tenancy start dates (and due date for rent) in the United States are the 1st, 3rd and 5th of each month.
In the UK the dates are all over the place, with properties coming on the market at any time and landlords having the discretion to decide when they want to start tenancies. This is important to remember, as your assignee won’t want to fall behind on payments right off the bat! However, this can also be a positive if you need the assignee to start at an odd time of the month or they’d like to move out of their temporary accommodation and into their flat quicker.
Additionally, in the UK, rent payment can be any day of the month, it’s not adjusted to the 1st of the month as is common in the states (Ex: Tenancy agreement starts 5th, rent due on the 5th), but is in line with exactly one month after the start date. Unlike the States, rent is not prorated for the first month based on move-in.
9.Deposit vs. Last Month’s Rent
In the US, oftentimes a landlord will take a deposit as the ‘last month’s rent’. If the deposit is considered last month's rent, then that's all it can be used for by the landlord. That money cannot be used to pay for damages caused by the tenant or to clean the apartment after the tenant moves out. If the landlord only requires a deposit of ‘last month's rent’, then that landlord has taken away from himself financial flexibility to pay for repairs and services typically required by normal wear and tear. Any such action will now have to be paid for out of the landlord's pocket.
But in the UK on the other hand, the deposit is always separate from any sort of inclusion with a rent payment – and always paid up front. The security deposit is a standalone payment and is oftentimes anywhere from 6-8 weeks rent. It’s much more prescribed in the UK and landlords won’t hesitate to use the security deposit to get back ££ to make any repairs or updates as they deem fit.
The above are my top tips based on 3 decades of helping Americans move successfully to the UK. In this article, I’ve only scratched the surface of all the many frustrations that Americans face when they have to negotiate our strange UK housing market.
If you’re moving people to the UK, the best way to avoid costly problems is to provide good relocation support that involves local experts who can take your assignees’ hand and guide them through the process and keep them safe, while minimizing the risks and costs for the business.
My team and I are always happy to answer individual questions and to make ourselves available to offer free initial advice.
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