Money.co.uk is predicting a very grim future for tenants in the UK. They say that the average deposit for a rental home will rise to £1,111 within ten years. In London, deposits could reach more than £2,700. The site also predicts that landlords will soon be asking for six weeks’ rent as a deposit while monthly rents will go up by 28%. This is far higher than the anticipated rise in salaries of 20% over the same period.
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Cost of Deposits is Rising
Deposits are expected to increase more in the South East. By 2026, the average deposit is estimated to end up costing tenants 83% of their monthly wage, whereas it is 72% of the average monthly salary right now.
According to Hannah Maundrell, editor-in-chief of money.co.uk: “The rapid rise in deposits as well as rents is a double blow for everyone on the rental ladder. With the forthcoming changes to tax legislation and crackdown on buy to let mortgages likely to erode landlords’ profits, there’s little doubt these costs will be passed onto tenants. The current booming property market” means deposits are likely to continue shooting upwards in the future, and we could well see six weeks’ worth of rent extended to eight.”
Bad News for Tenants
This is not good news for tenants, many of whom are being forced into the private rental sector because they can’t afford to buy a home. As a consequence, many people could still be living at home well into their 40s.