I’ve just moved into a new flat on my own – and boy does it cost a lot. Unfortunately, I’m far from alone in feeling ripped off by the rental market and excluded from the property ladder. So what’s to be done?
According to the latest research by LSL Property Services, rent prices have increased by 4.3% in the past year, hitting an average £718 per month in England and Wales. That’s £29 a month more than last year. Rents in London, the South West and West Midlands have increased by even more.
At the same time, competitive mortgage deals are only available to those with a hefty deposit. On a one-bedroom flat in London, that means saving up as much as £40,000 for a 20% deposit. How is the average renter expected to reach this figure if they’re paying half their take-home pay in rent?
And with fuel, food and transport costs going through the roof, savings rates still very low and the stock market uncertain at best, spare cash is both rare and, if there is any, unlikely to grow very much over time.
How can we solve out renting woes?
So what’s the answer? There have been a lot of reports in the news over the past week stating that older people should move into smaller properties once their children have flown the nest. But why should they move out of the home they’ve put years of time and effort into?
Another option is an increased private home-building programme which would not only lower rents in the longer term, but could also help the country build its way out of economic difficulty. But who is going to pay for them and where should all these homes be built? Certainly not on valuable greenbelt land.
My own view is twofold: I’d introduce a huge tax bill on any second homes that are not let out full-time, and also instigate a massive expansion of public-owned housing. This would increase the housing stock, reduce rents and aid the redevelopment of urban areas.
It would also ensure that the rent paid goes back into local councils’ coffers and help many more of us avoid the ridiculous fees imposed by private letting agencies (check-in fees, inventory fees, admin fees, check-out fees). Some estate agents are even adding excessive surcharges to credit and debit card payments.
Until that happens, hundreds of thousands of renters will be left paying through the nose, while existing homeowners and banks pull the ladder up behind them.