Earlier this month, the government’s energy regulator Ofgem announced a record 54 percent increase to the energy bill price cap. Combined with inflation hitting a 30-year high of 5.5 percent in January, a figure that’s expected to reach eight percent in April, the pressure on household finances is reaching boiling point.
For the 4.5 million households in the UK’s private rented sector recorded by official figures, around one fifth of the country, these cost of living increases will be particularly worrying.
According to the Intermediary Mortgage Lenders Association (IMLA), across the UK on an average month-to-month basis, living costs are 25 percent lower for homeowners than for those renting. This discrepancy ranges from 20 percent in the south east, to a painful 43 percent in Scotland. And of the one in 10 Britons who reported that they are struggling financially, a staggering 83 percent are renters.
So what does this mean for tenants?
Lettings platform Goodlord reports that the number of landlords asking for guarantors has risen 36 percent in four years, creating a vicious cycle in which property owners seeking protection from rent arrears puts renters in an even more precarious financial position.
Those in the private rented sector are facing a perfect storm of spiralling costs, while the prospect of becoming a homeowner – a group who are comparatively better able to absorb price rises – is increasingly difficult.
How about for landlords?
Of course this won’t just impact tenants, when tenants are not occupying the property, landlords are left to pay the bills for the property regardless.
Where flatfair comes in
flatfair is revolutionising the rental market and changing the way rental deposits are approached. For many, particularly those living in comparatively expensive cities such as London, five weeks’ rent is an enormous sum. A total of £4.5 billion is currently squirreled away in deposits, according to figures from the Tenancy Deposit Scheme.
For tenants, replacing big up-front deposits can save you a lot of cash that may be needed to cover those extra living costs, get you back on track with saving for a deposit and make the process of moving home much less of a financial strain.
flatfair can help landlords to reduce their void periods, as our No Deposit solution reduces the barriers to renting, giving you a larger pool of tenants who are ready to move in right away. As well as increasing the protection to up to 10 weeks and putting you back in pocket, within 10 days of any charges being established, much faster than with a traditional deposit.
A fairer solution
Our payment technology allows for tenants to pay a one-off fee instead of a full deposit, while guaranteeing the same protections that landlords and tenants have in the traditional deposit model: any charges and dispute resolution are decided at the end of the tenancy.
As a result, tenants pay less upon move-in and are more inclined to look after the property meaning that landlords aren’t paying out for hefty repairs at the end of tenancy, and tenants have the funds available to move into their next property.
Unlock Deposits
If you’re a tenant or landlord reading this, and thinking ‘damn, I already have my traditional deposit plan’, there’s no need to worry, as flatfair’s Unlock Deposits can help.
Tenants can release their current cash deposit for a one-off fee (of one week’s rent +VAT), which will give them some much needed cash at this time, and landlords increase their levels of protection in what are tricky, uncertain times too. It’s a win/win for everyone. Find out more about Unlock Deposits.
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