The initial financial hurdle of securing a rental property has increased by as much as 24% in some parts of the national property market, according to rental deposit replacement scheme Ome.
The study looked at the current initial cost of securing a rental home, based on one month’s rent plus a deposit of five weeks’ rent and how this has changed since the introduction of the tenant fee ban in June of last year.
The figures show that on a national level the cap seems to have had the desired impact, with the initial cost of renting in England as a whole down -2% year on year.
As a result, tenants are now paying a total of £1,897 upfront, -2% less than this time last year (£1,931).
But it’s a mixed picture regionally, with the cost of securing a rental property in London down -5% annually, while the South West has seen an increase of 4%.
In terms of the highest outright cost, Westminster is home to the most significant financial hurdle for tenants. One month’s rent plus a five-week rental deposit will set tenants back an eye-watering £6,854.
Kingston upon Hull is the cheapest place to secure a rental property with the initial cost coming in at £986.
In terms of the biggest increase, Corby has seen the cost of securing a rental deposit increase by 24% since this time last year. Exeter and Charnwood have also seen a jump of 23%.
Oxford, Newcastle-under-Lyme, South and West Oxfordshire, Chiltern, Liverpool, Doncaster, Rushcliffe, Haringey and Bristol have also seen the initial cost of renting increase by double-digits on an annual basis.
York has been the best place for tenant affordability, where securing a rental property is concerned. In the last year, the cost of one month’s rent and a five-week rental deposit has fallen by -18%. The Vale of White Horse is the only other area to see a double-digit decline at -11%. However, Elmbridge, Waverly and Daventry have also seen some of the most considerable reductions in rental costs.
Fee ban impact
Co-founder of Ome, Matthew Hooker, commented, “There’s no doubt that the tenant fee ban has had an impact on the affordability of renting. However, while some have seen the cost of securing a rental property drop, tenants in many parts of the national rental market have still seen sharp increases.
This increase will have been driven mainly by a reduction of rental accommodation to meet demand as many buy to let landlords reconsider their investments due to a string of government changes to the sector.
Particularly in the current climate, we must work across the sector as a whole to ensure both landlords and tenants are looked after and there is enough stock available to service this demand.
For those struggling to overcome this initial financial hurdle, there are alternative services available. A deposit replacement scheme such as Ome’s Deposit Replacement Membership can drastically reduce the initial cost of renting and help address the cash flow issues that stop many tenants from renting in the first place.”