Branch Secretary : suz.muna.unite@gmail.com
  

New report: impact of rising rent & deposits

 
 
 
Need 266% pay increase
 
If you are young and think you're going to buy a house any time soon, think again, because rising house and deposit prices mean that according to the National Housing Federation the average Londoner needs a 266% pay increase to make homebuying affordable - could that be your next pay claim? 
 
 
Unite calls for real rent control now and a mass programme of council house building - but the current governennt is set on the opposite course with it's housing bill. money.co.uk commissioned a report carried out by the Centre for Economics and Business Research which reveals the biggest price hike faced by renters in the next ten years will be deposits - predicted to rocket by 40%
 
 
New report highlights impact of rising rent and deposits
 
 
 
 
Rental deposits could account for up to 120% of monthly salaries by 2026 according to a report by the Centre for Economic and Business Research (Cebr) for money.co.uk.
  • In just ten years the average rental deposit1 is estimated to reach £1,111; this equates to 70% of the average Brit's monthly income at £1,576. In London, deposits are projected to rise to £2,733, sucking up 120%2 of one month's average salary3 at £2,281

  • Across the UK today, the deposit required by many landlords is four weeks' worth of rent. Based on current trends, in ten years' time an estimated 68% of deposits requested by landlords will be equivalent to six weeks' rent

  • The hike in rental deposits far outstrips the estimated increase in monthly rental costs which are set to rise by over a quarter (28%) to £1,111 by 2026. This eye-watering increase is dwarfed by the whopping 40% deposits are predicted to rocket over the same time period

  • Overall, rental inflation is estimated to outstrip the average increase in monthly salaries across the UK which is projected to grow by an average of just 20%3 over the same period

  • The extent of the problem is vast. By 2026 7.2 million households in England and Wales are estimated to be privately rented; this is two-thirds (66%) more than in 2014. By 2026 private renters are projected to represent almost a third (30%) of all households

 

 

With home ownership projected to be a luxury just over half (54%) the UK population will be able to enjoy by 2026, the rental market could run into overdrive.

 

In fact, getting on the rental ladder could present similar challenges in terms of cost as buying a home according to new research1 carried out on behalf of financial comparison website money.co.uk by the Cebr (Centre for Economics and Business Research).

 

The study reveals that the cost of the average rental deposit is estimated to grow by almost two fifths (40%) by 2026 hitting £1,111. This dwarfs the growth of the average monthly rent which is estimated to increase by an eye-watering 28% over the same period.

 

Rental deposits will suck up 120% of Londoners' salaries by 2026

In monetary terms, the average rental deposit in Great Britain will cost renters £1,111 in 2026 which is estimated to be 70%2 of the average monthly salary.

 

However, there are stark variations across the regions. In London for example, the average rental deposit is predicted to rise to £2,733 by 2026, sucking up 120% of the average monthly salary3 - up from 99% in 2015.

 

In fact, deposits are predicted to rise sharply across the whole of the South of England. In the South East the average deposit is estimated to hit £1,469 in 2026, representing over four-fifths (83%) of the average monthly salary at £1,761 - up from 72% in 2015.

 

In the South West it's a similar plight with the average deposit estimated to represent 80% of median monthly earnings (£1,437) by 2026 - up by 14 percentage points from 66% of the average salary in the region in 20153.

 

Landlords to demand six weeks' rental deposit

Across GB today, the average rental deposit requested by landlords is four weeks' worth of rent. Based on recent trends, by 2026 an estimated 68% of all deposits requested will be at least six weeks' rent. This means landlords will be demanding a lot more money from tenants before they sign on the dotted line.

 

By 2026, average monthly rents are set to rise by 28%

By 2026 almost a third (30%) of households in GB are expected to be privately rented, up by 10 percent from 2014. This 'landlords market' means it's not just deposits that are set to rise sharply over the next ten years.

 

Our research estimates the average monthly rent is also due to increase by 28% by 2026. Again, this is eight percentage points higher than the increase in average3 salaries over the same period which is set to grow by 20% by 2026.

 

Rents in London up by 39% by 2026 while in the South East they are estimated to grow by 34%

The largest increase in rents between 2015 and 2026 is estimated to occur in London with close to 39% growth.

 

Other regions with high estimated growth are the South West and South East where rents are predicted to grow by 32% and 34% respectively over the same period. The lowest increase in average rent is estimated to be in Yorkshire and the Humber with a 17% price hike between 2015 and 2026.

 

 

Monthly salary growth will not keep pace with the rental market

Between 2015 and 2026, the average monthly salary3 across GB and is predicted to rise by an average of 20% or £267, to hit £1,576.

 

This increase is lower than the estimated increase in both monthly rental costs and rental deposits which could mean many individuals will find the cost of renting just as unaffordable as buying. This is despite the fact the financial outlay required to rent is significantly lower than getting on the property ladder.

Click on 'download' for full report.

 

DOWNLOAD

POST A COMMENT!

Before Posting

We welcome debate and discussion on our website, but we also want an open, respectful, inclusive space in which forms of abuse or personal attack will not be tolerated. Comments will be moderated and will be removed if they are found to be unduly offensive. You should also be very careful in posting information about your employer. Employers do visit the website and if you think a comment could get you into trouble for releasing confidential or sensitive information, or for bringing the employer into disrepute, please do not post it. It remains your individual responsibility to ensure that what you post is appropriate. Please therefore just give a moment's thought to what you are saying. The types of comments that are likely to be moderated are:


  • Personal abuse or attacks on an individual.
  • Information which breaches another person's right to confidentiality.
  • The use of offensive language, including swear words, or language which is racist, sexist, or otherwise breaches equalities standards.
  • Anything that might place the Branch or the wider union in legal jeopardy.
  • Adverts or information which is posted for commercial gain.

* Name
* Email (will not be published)
Website
Comment
* field is required

NEWS ARCHIVE