Our latest research has revealed how much people are paying to secure a rental property and how this has changed in the last five years, as well as how this price increase compares to our everyday living costs throughout our day to day lives.
Our data shows that the current tenant is paying a rental deposit of £1,139, a 5 per cent increase compared to the £1,088 paid in 2014. Renting is thought to be one of life’s largest financial hurdles, with the traditional upfront deposit charged at the start of a tenancy posing an obstacle to the nation’s tenants.
However, when looking at the cost of a deposit compared to the inflation of other everyday costs, the figures show that deposits have increased at a lower rate than many other costs of living. This suggests that the issues of cash flow surrounding renting stretch much further than the deposit itself.
The cost of a basic pay TV package, such as Sky or Virgin, in the last five years has increased from an average of £22 to £28, this is the largest increase at 26 per cent.
While the cost of renting has increased, it is the cost of buying a home that has seen the second largest increase in the last five years, up 24 per cent to the current average UK house price of £231,265.
The amount spent on our mobile phones has seen the third largest increase, up 22 per cent, while the price of a Big Mac has also increased more than the average rental deposit (at plus +19 per cent).
Other items that have increased at a greater rate than tenancy deposits in the last five years are; car insurance (15.3 per cent), the price of gold (10 per cent), the cost of a pint (10 per cent) and the cost of a cinema ticket (6 per cent).
In fact, the only things to make the list that have increased at a lower rate than a rental deposit are home insurance costs (4 per cent) and petrol (-2 per cent).
During this time, the average UK salary has only increased by 12.4 per cent. This means that many day to day items have grown at a larger rate, although rental deposit are not one of these.
Our Co-Founder, Matthew Hooker, said:
“The rental sector has received a fair share of negative press in its time and much of this has been focused around the traditional deposit and the sums charged by agents at the start of a tenancy in order for a tenant to secure a property.
However, with the recent Tenant Fee Act shining a light on the fees charged by traditional letting agents, it’s interesting to see that in relative terms, the increase in the value of tenant deposits is actually smaller than the increase in our everyday living costs that is seen in our TV packages, mobile contracts, Big Macs, and even the growth in the average UK salary.
So it would seem that it is the cost of living within a property itself that is putting the greatest financial squeeze on the nation’s tenants, with the actual deposit only proving a problem for those unable to accumulate the large initial sum, or finding themselves short for other areas of life once they have.
Of course, many of these other costs are either small or provide the option to pay in instalments with the deposit being the last major cost that can’t be widely tackled in bite sized chunks.
That’s why we’ve seen a number of deposit replacement options enter the market in order to provide this choice and allow tenants to stay on top of the climbing costs elsewhere in life, by opting to pay their rental deposit on a more manageable monthly basis.”
Find out more about our Deposit Replacement Membership here.