Rents in the UK are rising at their fastest rate for more than two years; HomeLet reports a rise of 3.3% in the year to March 2019. With tax changes making buy to let a less attractive option to investors and the letting fees ban due to take effect from 1 June, everyone from landlords to agents are looking to rents to make up the difference.
Those entering this difficult market for the first time face a number of challenges. Much has been made of the issues that first-time buyers face in terms of large deposits and house prices that are significantly out of step with salaries. However, the challenges are also there for a growing number of would-be renters, according to UK rent guarantor service Housing Hand.
Jeremy Robinson, Group Managing Director at Housing Hand said:
“Figures from the Tenancy Deposit Scheme show that more than 40% of deposits for private rented homes are more than a month’s rent. For those who don’t fit the profile of a ‘typical’ renter – students, first time renters, care leavers, professionals coming to work in the UK from overseas, for example – deposit requirements can quickly spiral. It’s not uncommon for landlords to ask for six or even 12 months’ rent as a deposit or a down payment in such situations, which is beyond the reach of many people.”
The requirement to pay such large amounts upfront is often dropped if the renter can provide a guarantor for their rent. However, this is often yet another challenge for many of those looking to rent a home in the UK. This is where Housing Hand steps in to help. The company provides a rent guarantor service to students and working professionals, helping them to reduce the upfront costs of renting a home. Those coming to the UK from overseas to work or study can also access the scheme, as can workers on zero hours contracts.
The guarantor service is simple. The tenant engages Housing Hand to act as their guarantor, with the option of instalments spread over several months or making a single payment from as little as £295 for the service. Housing Hand then liaises with the landlord, letting agent or university in question to make the relevant arrangements. The company is even inbuilt into many of its partners’ booking forms, from letting agents and universities to accommodation providers, in order to streamline the process. The individual can thus rent their home without having to find thousands of pounds to use as a deposit.
Housing Hand has already helped and processed over 70,000 applicants from 141 countries. The company works with more than 3,000 accommodation providers and covered more than £120 million in rent. Their flexible approach means that even those with qualifying guarantors can protect themselves and their guarantors from up to £10,000 of potential rent liability when living in shared student digs, through the Only My Sharescheme.
The average rent in the UK is now £1,041 pcm, according to the Tenancy Deposit Scheme. In London, it is closer to £1,750 pcm. Not only that, but the rate at which rents are rising is projected to increase. RICS reports projected growth of around 2% over the year ahead, jumping to a rise of approximately 3% per annum by 2024, thanks to the growing imbalance between supply and demand.
“Moving into your own home should be an exciting milestone. We are doing what we can to ensure that people can achieve that dream in the face of increasingly difficult circumstances.”