The latest research by tenant deposit replacement scheme, Ome, has looked at the cost required to secure a rental property for the growing trend of over 60s opting for the rental market over home ownership and what percentage of monthly income this initial step requires, as well as how it compares to younger generations.
With high house prices coupled with the improving face of the rental sector causing many of us to rent for longer, Ome looked at the cost of the average rental deposit and what this translates to as a percentage of monthly net income for tenants based on gender and age.
With the average rental deposit currently setting tenant’s back £1,139, it can be a tough ask to accumulate such a large sum of money in order to secure a rental property.
For the average male, this cost equates to almost half a month’s wages (47%), climbing to 69% for the average female.
When it comes to age, those aged between 18-21 face the toughest task with the average tenant deposit accounting for 118% of the average salary. This falls to 105% for male tenants, while female tenants in this age range are looking at 138% of the net monthly wage to cover a deposit.
For those aged 22-29, it doesn’t get much easier, with a rental deposit costing 68% of the average net salary, falling marginally to 62% for males but climbing to 76% for females.
The latest English Housing Survey shows that over the last decade there has been a significant increase in the number of people aged 55-64 living in the rental sector. This also coincides with a fall in the number of people owning their own home in this age group.
In the words of Roger Murtaugh, you may think those approaching retirement would be getting too old for this s***, but the changing face of the rental sector proves this isn’t the case, with more and more of us opting to rent, well into later life due to a more tenant-friendly approach and better facilities for the more mature tenant.
However, Ome’s research shows that those aged 60 and above will on average, be required to spend the same proportion of salary to secure a rental property as those aged 22 to 29. Again, this drops to 55% for males in this age range and climbs to 88% for females!
Those aged between 30 and 59 are slightly better off as they hit full pace career-wise, although it would still require around half of their net monthly income to stump up a rental deposit.
Co-founder of Ome, Matthew Hooker said, “There are many tenants who are financially able to opt for the traditional deposit path when renting and for many it is a more preferable route, allowing them to pay there and then without any ongoing commitment or costs.
“That said, as our research demonstrates, it can provide a tricky obstacle and while it might not be such as issue in the long-term, it poses a cash flow problem for those required to stump up as much as a month’s wages in one hit.
“Of course, those in the youngest age groups tend to be on the lowest wages and as a result, have to pay out more of their monthly wage on a deposit, but more often than not they have a support network of family that can help them start out on their rental journey and contribute to some of the costs.
“However, this isn’t always the case for those 60 and above who may be on a lower wage and don’t have the option to borrow from friends or family and addressing this issue has been one of the driving factors behind the launch of deposit alternatives such as Ome.
“These alternatives allow tenants the choice to pay a smaller monthly fee over the period of a tenancy and with more of us remaining in the rental sector by choice, it provides a different path to do so without having to worry about large upfront deposits.”