Knowing what rent you can afford and costs to expect

Renting a home involves more than just the monthly rent. From upfront costs when you move in, to ongoing bills once you’re settled, it’s important to understand what rent you can afford alongside your other living costs.

Planning your budget early can help you avoid feeling stretched later, and put you in a stronger position when applying for a property.

Below is a breakdown of the main costs of renting, how affordability is assessed, and what to factor into your budget.

How much rent can you afford?

Before offering on a rental property, it’s worth working out not just what you feel comfortable paying, but what you’re likely to pass affordability checks for.

When you go through referencing to work out if you can afford the property, you’ll usually be considered able to afford the property if your income is around 40% of the total rent. If you’re renting with others and they’re named on the tenancy agreement, their income will be taken into account too.

How rental affordability is usually assessed

As part of referencing, most landlords and letting agents will assess whether the rent is affordable based on your income.

A common rule of thumb is that rent should be no more than around 40% of your gross (pre‑tax) income.

For example:

• If you earn £30,000 a year (£2,500 a month before tax), the rent you’re likely to be approved for is around £1,000 per month
• If you’re renting with others, incomes are usually assessed together, but everyone named on the tenancy is still jointly responsible for the full rent

Affordability checks are designed to make sure you can comfortably cover rent as well as other living costs, such as bills, travel, food and unexpected expenses.

If your income doesn’t quite meet the threshold, some landlords may accept a UK‑based guarantor, though this isn’t always an option.

Rent: weekly vs monthly

Rents are usually advertised as either:

• Price per week (ppw), or
• Price per calendar month (pcm)

It’s important to know that a calendar month is not the same as four weeks.

Monthly rent is typically calculated like this:

Weekly rent × 52 ÷ 12

For example:

• £300 per week × 52 ÷ 12 = £1,300 per month

Understanding this helps you compare properties accurately and avoid surprises when budgeting.

Deposits and other permitted payments

In England, there are strict rules around what landlords and letting agents can charge tenants under the Tenant Fees Act 2019. In addition to rental payments, permitted you might be expected to cover include:

• Holding deposit (capped at one week’s rent)
• Tenancy deposit (capped at five weeks’ rent, or six weeks if the annual rent is £50,000 or more)
• Changes to the tenancy requested by the tenant (for example, changing a sharer), usually capped at £50 unless reasonable costs are higher
• Early termination costs, limited to the landlord’s genuine financial loss
• Utilities, council tax, TV licence and communication services
• Late rent interest, capped at 3% above the Bank of England Base Rate
• Replacement of lost keys or security devices, where reasonable

Utilities and household bills

For most long‑term rentals, tenants are responsible for paying:

• Gas and electricity
• Water
• Council tax
• Broadband, phone and TV services
• TV licence (if applicable)

If you’re eligible for a council tax discount, for example, if you live alone or are a student, you’ll need to apply directly to your local council.

Your tenancy agreement should allow you to change utility suppliers, as long as the landlord’s consent is not unreasonably withheld.

If you sign up to fixed‑term contracts for things like energy or broadband, check whether they can be cancelled or transferred if you move out early, as exit fees may apply.

Renting with others

If you’re sharing a home, make sure everyone living there is named on the tenancy agreement.

If someone isn’t named:

• They won’t be legally responsible for rent or bills
• You could end up liable for the full cost if something goes wrong

If you want to rent out a room or take in a lodger, you’ll need the landlord’s permission. Any rent you receive may also be subject to tax.

Thinking long term

Staying in the same rental for longer can make budgeting easier and reduce costs.

Longer stays can help you:

• Avoid frequent moving costs
• Reduce the risk of overlapping rents
• Plan ahead more confidently

The upcoming Renters’ Rights Act changes are set to strengthen tenant protections when it comes to things like rent increases and bidding wars, making it easier for renters to plan their finances with more certainty.