The Bank of Mum and Dad help tenants with deposit costs

Nearly half of tenants (49%) consider the cost of the deposit when renting as being the biggest obstacle when searching for their most recent rental property, a survey reveals.

The Zero Deposit study points to Zoopla research highlighting that rental affordability is now at its worst in a decade, driven by the increasing cost of renting.

This means that many renters must dip into their savings or rely on other sources of income to secure a rental home.

And 15% of renters have had to borrow from the Bank of Mum and Dad to fund their rented home.

Tenants facing an affordability crisis

Sam Reynolds, the chief executive of Zero Deposit, said: “The rental market is an extremely tough place to be at present, with tenants facing the worst affordability crisis in the last decade.

“This is due to consistently high demand coupled with a lack of suitable stock, which has only driven asking rents higher and higher.

“Those who can afford to make their move face a very high level of competition when it comes to securing a rental property, but if they can’t act immediately, the chances are they will miss out.”

‘High cost of an upfront rental deposit’

He added: “The high cost of an upfront rental deposit is the driving factor that prevents many tenants from securing their desired rental property.

“While some are lucky enough to rely on savings or the Bank of Mum and Dad, others are putting themselves in further debt at a time when the cost of borrowing has grown considerably.”

He also says that many tenants have to wait for a previous deposit to be returned which can delay their move.

Use savings to pay for the deposit

The survey also reveals that 54% of tenants had to use their savings to pay for the deposit, while 11% had to wait for a deposit to be returned.

Another 6% had to take out a loan, 5% used credit cards (5%) or went overdrawn and 4% sold personal belongings to raise cash for a deposit.

However, 26% had to delay their move because they didn’t have the funds, and 21% missed out on the property they wanted as a result.

The majority (37%) of those who experienced delays had to wait a month, while almost a quarter (22%) had to wait more than six months.