Zoopla's latest quarterly Rental Market Report has revealed that rental affordability, the percentage of gross earnings needed to cover the average rent, is now at its highest level for a decade. At 28.4%, the number shows that rental costs are outpacing wages. The average UK renter has seen their costs rise by £2,800 in the last three years and can expect to continue to pay an extra £1,320 annually. Furthermore, recent Zero Deposit research showed that, in some parts of the country, rents have increased by 41%.
In addition to the cost of living crisis caused partly by the war in Ukraine, the rental supply is now 30% below average. With a lower availability of rental homes, prices have risen sharply as a consequence. With the additional costs of electricity, fuel and gas, the total expense for a rental tenant is becoming increasingly beyond their capacity.
If your rental situation is becoming unsustainable, we recommend exploring your options now that a few Government schemes are available for buying a home. Shared Ownership allows UK buyers to buy a share of a leasehold home and pay rent on the remaining share. Although it might sound expensive, when looked at closely, the scheme can become incredibly convenient. For example, rental costs can be at 2.75% of the value of the outstanding share over one year, keeping a monthly fee relatively low. Moreover, the minimum deposit for purchasing a property is 5% of the purchased share, bringing the deposit cost of many properties to even £5000 or less. Some available properties are SO Resi Farnham, SO Resi Canning Town and SO Resi Bracknell.
Another scheme that has been recently launched to help people jump onto the property ladder is SO Flexi. This is a reduced property rent, to help people save a deposit over two years, allowing them to later purchase a Shared Ownership home. While the available schemes are only SO Flexi Slough and SO Flexi Acton at the moment, more will become available next year and later.
Whilst you're here, take a look at our other blogs for the latest interior trends and our favourite first-time buyer hotspots. You can also stay tuned by following us on Instagram, Facebook, and Twitter.
Written by the SO Resi In-House Team