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0:06 AM, 15th September 2023, About 8 months ago 2
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The average renter in the UK must spend 64% of their net monthly income just to pay the deposit on a new rental property, a study reveals.
The findings from Zero Deposit highlight that for women, the proportion is even higher, at 77%.
The study, which compared the average monthly earnings (net) with the average price of an up-front tenancy deposit, showed how the current rental market is putting a strain on tenants’ finances.
The chief executive of Zero Deposit, Sam Reynolds, said: “Renters up and down the country are facing an incredible financial challenge at the moment, especially those with lower incomes who are undoubtedly struggling with the high cost of living.
“But this is a challenge for the majority of renters, with little hope of improvement in 2023 without urgent Government intervention.”
He added: “High demand for rental properties means it’s a task in itself to find a suitable property and, once you have, there is the sizable upfront cost of a tenancy deposit to contend with.
“This is made worse by the fact that many have to pay up before receiving their previous rental deposit back.
“This simply isn’t financially viable for the average tenant and, as a result, many are unable to move at the pace that the current rental market requires, leaving them in a cycle of being stuck in a property they are keen to leave, forced to borrow to find the deposit or effectively out in the cold and without a home.”
The study found that the average monthly rent in the UK is now £1,243, which means the average tenancy deposit is £1,434, based on the common requirement that a deposit is set at the value of up to five weeks of rent.
And since the average net monthly income in the UK is £2,228, renters must spend 56% of their income every month to cover the cost of their rent.
The study estimated that the total cost of securing a rental property is £2,677, which is equivalent to 120% of the average net monthly income.
The findings also highlight the gender pay gap which affects the affordability of renting for women more than men.
Zero Deposit says the average net monthly income for a UK male is £2,590, which means they need 55% of their income to pay the deposit and 48% to pay the rent.
However, the average net monthly income for a UK female is £1,858, which means they need 77% of their income to pay the deposit and 67% to pay the rent.
The study also analysed how different professions fare in the rental market and found that cleaners, hairdressers and chefs are the worst hit.
Cleaners need 148% of their monthly income to pay the deposit and 128% to pay the rent; hairdressers need 130% and 113%; and chefs need 96% and 83%.
Other professions that need more than 50% of their monthly income to pay the deposit include secretaries, estate agents, nurses, marketing professionals, IT workers, plumbers, electricians and teachers.
Even high earners such as pilots, doctors and lawyers need more than a third of their monthly income to pay the deposit.
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Teessider
19:13 PM, 15th September 2023, About 7 months ago
Here’s an idea. Why don’t two people (a couple, if you like) pay half each. Then, the deposit eats up much less of their monthly income.
And remember, it remains their money.
Steve Hards
10:31 AM, 17th September 2023, About 7 months ago
Are deposits in the UK are difficult for tenants? In Spain, where tenants (and squatters) generally have more rights than owners, it is usual for tenants to have to lodge six month's rent with their bank in the form of a guarantee (un aval) against which the landlord can claim if rent goes unpaid. Not only will the bank use that large chunk of money on which they pay no interest but they charge for the 'service' as well!