“Runaway rents” hurting tenants’ financial resilience – claim

“Runaway rents” hurting tenants’ financial resilience – claim


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A senior financial analyst says “runaway rents” are destroying the financial resilience of tenants.

Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, is responding to government figures showing that 51 per cent of tenanted properties surveyed had seen a rent increase in the year to February. In London this was 67 per cent, in the South East 62 per cent and in the South West 53 per cent.

Among those with rising rents, the average hike was 10 per cent – up from seven per cent a year earlier. 

Coles says: “Runaway rents are crushing the finances of those trapped in increasingly expensive homes. More than half of tenants have seen their rents hiked in the past year, and on average they’re up 10 per cent. It’s no wonder that they face such huge challenges to make ends meet – let alone get onto the property ladder.

“The figures in London are particularly painful, with more than two thirds of rents hiked an average of 12 per cent. Given that private renting is far more common in London – at 29 per cent compared to an average of 19 per cent – the impact is felt even more widely.

“Runaway rents hit hard, because while [the government’s] Family Resources Survey showed that the average rent is the same as the average mortgage – at £150 a week – it makes up a much higher proportion of the income of renters, because they tend to be on lower wages.”

Coles continues: “And it’s not just your day-to-day finances taking a hit, because renters are spending so much keeping the wolf from the door that they’re struggling to put anything aside to help them onto the property ladder. It’s why the Family Resources Survey showed people are renting for longer. 

“Within every age category, the proportion in the private rental sector is up over a decade – with the proportion of those aged 35 to 44 who are renting rising from 19 to 26 per cent.”

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