The homelessness charity, Shelter, say that Private Rental Sector (PRS) rent increases are leaving more tenants in a rent trap.
According to the charity, private sector rents in England are rising by an average of almost £300 a year across the country, in the South-East where PRS rents in some areas have gone up over £2,000 (GBP) within 12 months.
Shelter says, many tenants are in a rent trap with little or no finances left to save for a home of their own, as a result. Placing tenants in the difficult position of either paying the rent in full and on time or being able to afford enough food for their family for the month.
The report from Shelter titled “The Rent Trap”, analyses Government figures and shows that average private rented sector rent rose by 2.8% from 2011 to 2012, equivalent to an increase of £297 (GBP) in a year on a typical rented property.
These figures are put into perspective when you consider that the average wage in England did not rise at all during the same time frame.
In 14% of local authority areas saw rent increases averaging £500 (GBP) per year, although in 6 areas this figure was more like £1500 per year, including Elmbridge and Surrey Heath.
Shelter commissioned a survey of 4,300 tenants in England and discovered:
- 55% of tenants said that after paying rent and utility bills, they were left with less than £100 each month to cover other essentials.
- 72% of tenants said that they are only able to put aside £50 or less each month
- 58% of tenants said they were not able to save any money at all.
The areas in England with the fastest rising rents are
- Surrey Heath – 14.1% rent increase equivalent to an increase of £1,756 (GBP) per year
- Elmbridge – 14.1% PRS rent increase – equivalent to an increase of £2,178 (GBP) per year
- Merton, London 13.7% PRS rent increase – equivalent to an increase of £1,805 (GBP) per year
- Rutland 11.6% PRS rent increase equivalent to an increase of £859 (GBP) per year
- Wandsworth 11.4% PRS rent increase equivalent to an increase of £1,845 (GBP) per year
- Gravesham, South-East 11.1% PRS rent increase equivalent to an increase of £823 (GBP) per year
- Warwick 11% PRS rent increase equivalent to an increase of £799 (GBP) per year
- West Oxfordshire 10.8% PRS rent increase equivalent to an increase of £1,096 (GBP) per year
- South Bucks 10.3% PRS rent increase equivalent to an increase of £1,736 (GBP) per year
- Lambeth 9.8% PRS rent increase equivalent to an increase of £1,477 (GBP) per year
Chief Executive of Shelter, Campbell Robb, said: “This report reveals the huge scale of the rent trap holding back young people and families up and down the country. Rising rents are leaving people with little or nothing to save at the end of each month, giving them little chance of ever saving enough to climb on to the property ladder. The tenants we speak to have never been less hopeful. A relentless stream of rent rises means that most feel they will never move on from a life paying dead money to landlords, in a home that they can’t make their own. And for some, rising rents have more immediate consequences – not enough money to spend on food, fuel or other essentials. Unless something changes, the chances of the next generation getting a home to call their own look increasingly bleak. The Government needs to show young people and families exactly how it plans to dismantle the rent trap for good.”
If you are a landlord with a tenant who is worried about meeting their financial obligations every month, speak to us about Rent Guarantee Insurance and gain some peace of mind.
Call 0844 567 4001