The latest research from leading room share platform, ideal flatmate, has looked at an alternative way to save that all important mortgage deposit while renting in the capital without compromising your rental locations, social life or calorie intake.
ideal flatmate looked at how much the average tenant could save in each borough by opting for a single room instead of renting a one-bedroom apartment of their own, based on the average cost of each across the capital.
ideal flatmate then looked at the required mortgage deposit at 10% of the average first-time buyer house price in each borough, before working out how many years it would take with the savings from house to flat sharing to reach this deposit.
Across London the average cost of a one-bedroom property is £1,300 a month, while a room will set you back just £600, a saving of £700 a month. This equates to £8,400 a month and with the average first-time buyer house price in London currently at £412,679, it would take just under five-years (4.9) to save the £41,267 10% mortgage deposit required.
The best borough for this alternative foot on the ladder was Hounslow. The average one-bed apartment costs £1,300 to rent, with a room costing just £596 to £704 cheaper a month or £8,448 a year. With this saving, it would take a tenant in Hounslow just over 4.2-years to compile the required deposit of £35,308
Enfield, Ealing, Tower Hamlets and Newham all provided a large enough saving to ensure tenants could save a mortgage deposit to live in the borough in less than five years.
At the other end of the table it would take tenants in Kensington and Chelsea 10.4-years to save a deposit with their room rental savings as a result of the extreme property prices in the borough.
But perhaps more surprisingly, it would also take tenants in Bexley the same amount of time for the opposite reason. The cost of renting a one bedroom and a room in the borough are both very reasonable so the saving is small, meaning it would take the same time to stump up the £31,000 deposit required in Bexley, as it would for the £120,716 deposit in Kensington and Chelsea.
Co-founder of ideal flatmate, Tom Gatzen said, “The financial barrier of transitioning from a tenant to a homeowner in London is huge and when coupled with a lack of suitable rental stock available, it’s currently one of the biggest factors putting a strain on the capital’s rental market.
“We completely understand that for many, the only viable option when living in the capital is to rent a room in a house or flat share already and there’s a very good chance that house prices in London will be higher than they are now in four to five years’ time.
“However, while we know the idea of saving for a mortgage deposit seems impossible, we wanted to get people thinking outside the box on ways they can make a lifestyle adjustment in order to start tackling this mammoth task, without compromising the area in which they live or having to forsake avocado for breakfast.”
|Borough||Average Rent (1 bed)||Single Room Rent||Monthly Saving||Yearly Saving||FTB House Price||Mortgage Deposit Required @ 10%||Years of Saving Required|
|Barking and Dagenham||£950||£592||£358||£4,296||£287,108||£28,711||6.7|
|Hammersmith and Fulham||£1,400||£801||£599||£7,188||£641,542||£64,154||8.9|
|Kensington and Chelsea||£1,950||£980||£970||£11,640||£1,207,159||£120,716||10.4|