Every 1 in 7 individuals has been facing increased rentals since October 2022. The average rent amount in the UK stands above £1100/month. The primary reason behind this is the shortage of homes, no new constructions, the demand for property is high than the available properties, etc.
Property viewings are merely a pomp show as it sells before the viewings. Moreover, the rising cost of living and economic crisis contributes to the due mess. With frequent rental increases by landlords, renters find it challenging to stick by and manage within the available disposable income. It is surely not a good time to rent a house. The rentals have increased many folds owing to the high demand.
Yes, the UK is witnessing bidding wars. Amid this, landlords prefer to rent to a person who could pay 6-12 months upfront rent. And it is impacting undergraduates and unemployed tenants to keep up with the rising competition. Moreover, established renters face eviction notices without fault under section 21. Yes, they are being kicked out of the house without any warnings or reason.
British universities are inviting new applications for a new term, leading to an overcrowded rental market. With house prices beyond affordability, students seek economic rentals. The situation is tricky for first-time homebuyers on low incomes. And as per the existing scenario, they will have to wait.
The whole thing makes individuals resort to external financial sources like instant cash to fund basic requirements or bridge rentals timely.
What Are the Consequences of Rising Rental costs in the UK?
As a result of this rental price hurricane, around 2,70,000 families stand the risk of losing their properties post-living for years. It is impacting the younger population belonging to not-so-rich backgrounds.
With food inflation exceeding 10% and energy bills pulling the pockets, it has become sincerely important to seek affordable renting solutions or figure out ways to survive sustainably amid the prevailing conditions. With bills expansion and squeezed wages/salaries, keeping up with bills requires alternative solutions. Non-repayment of rent may lead to eviction and homelessness.
Thus, you must update your consciousness and effort toward retaining the tenant agreement.
5 Ways to Battle Rising Rental Impactfully
As per statistics, rent is rising by 9.5% to avoid eviction for renters. Though the government plans to ban section 21, it has yet to materialise.
Now you are quite familiar with the UK property and rental market, here are some tips that you can take to keep your head above the water and ensure stability:
1) Identify the rent amount you can afford monthly
When you rent a house, there is not only a bill that awaits your attention; instead, rent is an addition to the existing liabilities.
Therefore, before settling and signing the tenant agreement, analyse the total expense for the month. Can you manage rent amid- subscription, utilities, insurance premiums, and emergency surprise expenses?
Budget and draw out a realistic estimate of the aspects of your lifestyle that you cannot skip or put on hold. It may include:
- Phone bills
- Childcare maintenance
- Credit card payments
Draft a budget upon having the nearby or the exact amount of the outgoings. Factor in the existing debts on your credit report too. Compare the total outgoing amount with your income. It will help you approach a realistic amount you can afford as rental payments.
2) Prefer a landlord to a broker agent if renting
It is always better to deal directly and discuss renting terms with him rather than going via a broker agent. But it also depends on the knowledge of the area and the budget. Each option has its pros and cons:
If you deal directly with the lender:
- You may have to pay less before moving
- You may not need any references
- Your landlord may conduct only a soft credit check of your finances
Conversely, if you partner with a broker to find a suitable rental:
- You may have to research to spot affordable broker
- Pay the brokerage fees
- Acquaint them with suitable property types and repairs. He will get it done for you
- You may lose upon establishing a personal connection with the landlord. It is critical in times of eviction and uncertainties.
- An ideal choice if you are new to the country and need an immediate home to rent
Both aspects are feasible. But it is all about balancing both sides of a coin, i.e., –
- Securing an affordable rental
- Establishing good repo with the landlord
3) Get an affordability check done if you hold benefits
Some landlords may deny renting the facility if you hold any benefits like Housing benefits and housing costs payments through universal credit.
- If you have been turned down by a landlord in the past owing to any such issues, take the below initiatives:
- Ask them to do an affordability check to ensure transparency on finances.
- Check if you can get a reference from your previous landlord. Having a good relationship with your landlord can prove a plus point with your next landlord.
- Get a guarantor or someone who can back your finances if you cannot keep up with the rental payments. It would help provide additional security to the landlord. He may agree to provide the rental space with the condition.
4) Ask the landlord a few questions to ensure affordable rental
The foremost thing to ensure when you land in a new country or are a citizen of the same is – SAVINGS.
Before settling for a landlord, always explore your best choices. Analyse and engage in a conversation with your landlord regarding the following aspects:
- How much rent do you have to pay?
- How much will it rise, and within how much time frame?
- How will he accept the payment- cash or online?
- Whether you need to make any upfront payment?
- Is there something like an advance rental in the agreement?
- How will he protect the tenancy deposit?
- How much will the deposit be? Compare this deposit with other facilities.
5) Save for the deposit before you commit to renting
Deposit is likely to be the biggest expense if renting a new space. Thus, saving for a deposit a few months before moving in as a tenant is advisable.
If you provide the deposit, get it in writing to safeguard the security of the same. By law, the agreement must be protected under a government-approved scheme.
The refundable deposit amount in England and Wales is capped at most 5 weeks. It is when the rent is less than £50000.
The tenant can take the deposit the day he leaves the premises. In case of property damage, the landlord may deduct the sum.
However, there are situations that individuals face regarding the same. It can be anything like :
6. What If I Need Urgent Rental Space and lack Money for a Deposit?
In a country like the UK, it becomes critical to be backed by sound finances. It helps counter any such requirements without any pressure or panic.
However, it has become almost impossible to save for a deposit. Individuals prioritise meeting necessities over saving for a future event. It is not new in that anyone can encounter any emergency while saving. It may rob you of the available cash surplus.
But if you are heading towards owning a new rental or searching for a place urgently, backing it up with a sufficient deposit is critical.
If your previous credits are in good shape and you need urgent Money, check unsecured loans for bad credit from the best direct lenders only in the marketplace. It would help you arrange for the Money without tangibly affecting your assets or bottom line at better interest and terms.
It would help if you took notice of a good rental space when everyone is battling for it. These funds cover it for you.
The blog talks about practical ways to counter sudden spikes in rental costs and react accordingly toward expenses and budget. It narrates the ways to rent any space legally and affordably.