The UK’s national monthly rental bill is a staggering £3.6 billion1, according to data published today by Experian, the global information services company. This amounts to private renters spending an average of £695 a month on rent – all whilst trying to balance their accommodation costs with saving for a deposit on a home of their own.
Experian’s survey of 1,500 private renters reveals seven in 10 (71%) people are making sacrifices in their lifestyle in order to meet their rental costs2. Three-fifths (60%) have been forced to go without things like holidays and leisure activities so they can afford their monthly payments.
Meanwhile, most renters fear an increase to their monthly payments, with three quarters (74%) stating they can currently make ends meet but if their costs grew they would find it difficult to cope. One in ten (9%) tenants have already had to move properties because they needed to find somewhere with a lower rent. The average monthly rental asking prices in London’s commuter belt (£1,250) are the highest in the UK3.
Impact on the ability to save
Renters in the UK are increasingly finding it difficult to balance paying their rent with saving for a deposit. Three-quarters (74%) say paying rent means they can’t afford to save as much or as quickly as they’d like to, while two thirds (66%) believe renting is a waste of money but they have no alternative. Meanwhile, around the same percentage of people had to dip into their savings even before they could rent their home – 63% used savings to fund their rental deposit, while a further 25% had to borrow money to cover the deposit.
Rental costs also consume a large proportion of people’s monthly income. One in eight (13%) spend more than half their monthly income on rent. Younger people are particularly stretched, with 22% saying they spend the lion’s share of their income on accommodation.
Experian’s Jonathan Westley commented: “Saving money for a deposit on a house while paying rent each month is tough, so it’s understandable so many tenants are making sacrifices. If you want to buy a place of your own, it’s important to make a plan so you can balance saving an affordable amount with your day-to-day living costs. Making sure your rental payments contribute to your credit history is another example of a small step you can take to owning your first home.”
To help private renters to get a mortgage, access finance or prove their identity online, Experian has developed the Rental Exchange. It allows rental payment information to be submitted to Experian, which will help strengthen renters’ credit histories and ease their difficulties when they buy a home.
Tenants can sign up to the Rental Exchange through Experian’s joint initiative with RentalStep. Rental payment information will begin building people’s credit history from the point they sign up, before the data appears on Experian credit reports later in 2016.
For further information about the Rental Exchange or to get involved, please visit: experian.co.uk/rental-exchange