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Cost of living crisis hitting renters most, suggests advice service

Renters without a property to sell are likely to be the worst demographic sector affected by the cost of living crisis according to an advice service.

Stipendium says that while inflation and particularly energy costs have hit everyone, those with a buffer of home ownership - especially after values have risen some 10 per cent in the past year - probably have a greater financial cushion. 

It says that by contrast a first time buyer currently renting will have seen an average 15 per cent deposit climb by a further £4,075 in just 12 months.


At the same time, the cost of renting has also increased by 8.7 per cent, costing £1,078 per month versus £992 per month a year ago. 

“But it’s the recent escalation of the cost of living crisis that is adding the most strain to a first-time buyer’s ability to save” says a statement from Stipendium.

The service says in the last year the energy bill price cap has climbed by 73 with this now set at £1,971 per year compared to £1,138 - an annual increase of £833.

At the same time, fuel costs have climbed by 29 per cent per litre for petrol and 36 per cent per litre for diesel, meaning people are now paying £0.36 and £0.47 more per litre at the pumps respectively. 

The service’s chief executive, Christina Melling, says: “If there’s one measure that really demonstrates just how much the cost of living is climbing, it’s the fact that both energy and fuel cost increases have eclipsed house price growth by quite some margin over the last year. 

“Quite some feat given the housing market has been running red hot pretty much throughout the pandemic … It really does demonstrate the tough task facing homebuyers on all fronts, especially those without the financial cushion of a property to sell. 

“Not only is the deposit required to secure a home now substantially higher, but monthly rental costs have also climbed and the ability to save is being further squeezed by some huge jumps in general day to day living costs.”

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    Likely to be, probably, average........

    In reality tenants can be the people most protected from these cost of living hikes. None of my existing HMO tenants have had a rent increase since the day they moved in. Their rent includes council tax, gas, electric, water and broadband. Some of them have been in the houses for over 5 years and still pay exactly the same rent as 5 years ago.


    Surely if you are paying tenants council tax and utilities bills you will have to increase their rent substantially, other wise you will be losing money, there's no point in that, we don't have charity status .


    It's kind of a balance. Changing a tenant isn't free. There's likely to be at least a couple of days void, maybe longer if the room needs redecorating or it's a quiet time of year. My longest staying HMO occupants are all really good tenants. The kind who look after the property, notify me appropriately of maintenance issues, pay their rent on time, engage with the process of finding new compatible housemates as rooms become vacant, etc. The kind of people who create a home and mini community rather than just view an HMO as somewhere to sleep.
    As people move on the rent for the new tenant is whatever seems appropriate compared with various property websites.
    So while I could certainly increase rents I'm not convinced it would increase my profit by a significant amount whereas it would undoubtedly increase my workload.

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    Not sure about this. For home owners it might be nice to know your house is worth more than you paid for it, but unless you remortgage you can't extract any of the equity until you sell. Then unless you move to a cheaper property you are no better off, and you will have the costs of buying and selling to contend with. Tenants have protections that home owners don't, also the costs of moving to cheaper accommodation are far less than buying and selling. Mainly a removals van if you don't have a mate with a van. I do agree if you were a FTB in 2019 you would have got a much better deal than a FTB today.


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