The cost of renting a home in the UK could rise markedly across the course of the next decade, with the price of deposits apparently set to rise far faster than the price of actual monthly rent in the same period.
At the moment, most landlords charge tenants around a month's worth of rent for their rental deposit, but these security payments, according to money.co.uk, could become much higher in the next decade, potentially even making it harder for people to get onto the rental ladder.
It said that by 2026, the average cost of putting down a security deposit on a rental property will be some £1,111. This represents a rise in the period of just ten years amounting to 40 per cent, which is much higher than the rise in the cost of renting a property, which is set to climb by 28 per cent in the same time frame.
By 2026, the company said, deposits will be worth as much as 70 per cent of the monthly average income for tenants, and with many people having little to no savings, paying this on top of the first month's rent could prevent them from actually being able to afford to rent.
Areas where tenants are most likely to be adversely affected are in the south of England, with a 120 per cent rise in deposits expected in London within the decade. It's a similar story in the south-east, where there are predictions that deposits will climb by as much as 83 per cent.
"The rapid rise in deposits as well as rents is a double blow for everyone on the rental ladder. With the forthcoming changes to tax legislation and crackdown on buy-to-let mortgages likely to erode landlords’ profits, there’s little doubt these costs will be passed onto tenants," said Hannah Maundrell, editor in chief of money.co.uk.
"The current booming property market” means deposits are likely to continue shooting upwards in the future, and we could well see six weeks’ worth of rent extended to eight. Many not only face being priced off the property ladder but also the rental ladder too."