Rental deposit costs dwarfed by increase in TV, mobile contracts and Big Macs

The latest research by lettings deposit replacement scheme, Ome, has revealed how much we are paying to secure a rental property and how this has changed in the last five years, as well as how this price increase compares to other items throughout our daily lives.

Ome’s data shows that the current tenant is now paying £1,139, a 5% increase compared to the £1,088 paid in 2014. Renting is thought to be one of life’s largest financial hurdles, with the traditional upfront deposit charged at the start of a tenancy, in particular, posing an obstacle to the nation’s tenants.

However, when looking at the cost of a deposit compared to the inflation of other everyday costs, the figures show that deposits have increased at a lower rate than many other costs of living, suggesting the issues of cash flow surrounding renting stretch further than the deposit itself.

The cost of a basic pay TV package, such as Sky or Virgin, has increased from an average of £22 to £28 in the last five years, the largest increase at 26%.

While the cost of renting has increased, it’s the cost of buying a home that has seen the second largest increase in the last five years, up 24% to the current average house price of £231,265.

The sum we spend on our mobile phones has seen the third largest increase, up 22%, while the price of a Big Mac has also increased more than the average rental deposit (+19%).

Other items that have increased at a greater rate than tenancy deposits in the last five years are car insurance (15.3%), the price of gold (10%), the cost of a pint (10%) and the cost of a cinema ticket (6%).

In fact, the only things to make the list that have increased at a lower rate than a rental deposit are home insurance costs (4%) and petrol (-2%). During this time, the average UK salary has only increased by 12.4%, meaning many day to day items have grown at a larger rate, although again, rental deposit are not one of these.

Co-founder of Ome, Matthew Hooker, commented: 

“The rental sector has received a fair share of negative press in its time and much of this has been focussed around the traditional deposit and the sums charged by agents at the start of a tenancy in order for a tenant to secure a property.

However, with the recent Tenant Fee Act shining a light on the fees charged by traditional letting agents, it’s interesting to see that in relative terms, the increase in the value of tenant deposits is actually smaller than the increase seen in our TV packages, mobile contracts, Big Macs, and even the growth in the average UK salary.

So it would seem that it is the cost of living within a property itself that is putting the greatest financial squeeze on the nation’s tenants, with the actual deposit only proving a problem for those unable to accumulate the large initial sum, or finding themselves short for other areas of life once they have.

Of course, many of these other costs are either small or provide the option to pay in installments with the deposit being the last major cost that can’t be widely tackled in bite sized chunks. That’s why we’ve seen a number of deposit alternatives enter the market in order to provide this choice and allow tenants to stay on top of the climbing costs elsewhere in life, by opting to pay their rental deposit on a more manageable monthly basis.”

Variable
Five year change (2014 – 2019)
Basic pay-TV price (monthly)
26%
Average house price
24%
Mobile usage price (monthly)
22%
Big Mac
19%
Car insurance premium (annual)
15%
UK Net Salary
12%
Gold
10%
Pint of beer
10%
Cinema ticket
6%
Tenancy deposit
5%
Home insurance premium (annual)
4%
Unleaded petrol (pump price)
-2%

 

Sources
Rental Deposits
Ome
source1 – Ome unique data
TDS
Car insurance
Money supermarket
Home insurance
Money supermarket
Mobile phone & TV costs
Ofcom
Average house price
Gov/Land Reg
Gold historical prices
Bullion by post
Cinema ticket statistics
Statista
Petrol prices
RAC
Price of a pint of beer
ONS
Big Mac price statistics
FM
BL
Average salary data
ONS

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Breaking News

Where can you still buy a home for under £150k?

Zoopla reveals Great Britain’s property bargain hotspots Just 12 per cent of all homes for sale across Great Britain are priced under £150,000 making location key for home buyers looking for a bargain In the North East, a remarkable 41 per cent of all homes for sale fall within this price range, followed by Scotland…
Read More
Breaking News

Landlord repossessions soar as Renters’ Rights Bill looms

Landlord repossessions soar as Renters’ Rights Bill looms, with some areas seeing increase of over 2,500% The latest analysis from Dwelly, one of the UK’s leading lettings acquisition and success planning experts, shows that landlord repossessions have increased by 6.8% across England and Wales. However, in some areas of the country they have soared by…
Read More
Breaking News

These are Britain’s most active housing markets

New research from The Property DriveBuy reveals that the busiest homebuying postcodes in Britain right now are found in Croydon, Buckinghamshire and Waltham Forest, however, for those hopeful homebuyers facing tough competition, shifting to a neighbouring postcode could see them secure a property. The Property DriveBuy analysed latest housing market data to discover which of…
Read More
Breaking News

Downsizers can bag 2 for 1 on property purchases

The latest research from over-50s property specialists, Regency Living, reveals that downsizing retirees could own two homes for the price of one, combining a comfortable home in England with a sunny escape in Europe. According to Regency Living’s latest analysis, retirees who sell a traditional bricks and mortar house and purchase a park home can…
Read More
Breaking News

New analysis shows majority of estate agents complete HMRC AML registration

Just 5% of branches still need to register More than 24,000 UK estate agency branches have registered with HMRC for money laundering supervision – an increase of around 2,300 branches in just over a year, according to new analysis from client due diligence platform Thirdfort. Some 24,003 estate agent branches across the UK have registered…
Read More
Breaking News

Gen Z could wait until 2044 to buy a home

Getting on the property ladder has never been tougher, and, for Gen Z, it could take up to 18 years to save a deposit in the UK’s least affordable cities, according to new research from Beswicks Legal, comparing 40 urban centres. The figures reveal that in places like Cambridge and London, Gen Z buyers may…
Read More