We’re fully committed to supporting local landlords, and this begins long before a tenant moves into the property. Selecting the ideal candidate to live in rental property has a huge impact on the success of the let, and at David Harris & Co, we do everything we can to ensure you let your property to the right tenant.
Recent research by Reposit has shed light on a concerning trend – an increasing number of tenants are resorting to borrowing money to fund their cash deposits.
The study, which polled 1,000 current renters, revealed that a staggering 38% of tenants are turning to friends and family, using credit cards, personal loans, or dipping into their overdrafts to cover the costs of moving homes. Alarmingly, this figure has risen by 8 percentage points over the last 12 months.
This trend can be attributed to the significant increase in average monthly rents, which have risen by 10% from £990 to £1,088 between March 2023 and March 2024. The rise in rental costs has forced the average five-week cash deposit to reach £1,256, leaving many tenants struggling to gather this substantial lump sum.
The survey findings further reveal that 20% of renters are using credit cards to fund their cash deposits, 15% are borrowing from friends or family, 12% are dipping into their overdrafts, and 8% are using personal loans. In some cases, renters are employing multiple sources to secure their deposits.
These alarming figures can be attributed to the months of high inflation, which has exacerbated tenants' financial difficulties. Although inflation is now falling, it remains higher than the Government's 2% target at 3.2%, keeping living costs elevated.
It is vital landlords are aware of this trend and its potential implications. Tenants who are burdened with debt or struggling financially may face challenges in meeting their rental obligations, potentially leading to late payments or even defaults. Additionally, this trend could also impact tenant retention, as financially strained individuals may seek more affordable housing options.
This is why vetting potential tenants is one of the most important parts of the letting process, and this is a step we take seriously. If you would like to learn more about how David Harris & Co not only protects your property and business, we make sure you have a platform for many years of success, and financial returns.
Reposit CEO Ben Grech said: “There’s a misconception that tenants who can produce a five-week cash deposit of £1,200 are more financially reliable than those who would prefer not to commit this large amount of money. However, this is not the case because as our survey shows, almost 40% of tenants are borrowing money for their cash deposit. Assessing affordability therefore is best carried out by quality referencing and checks by specialist providers.”
We have assisted many Finchley homeowners and landlords looking to let their property, and we know what tenants are looking for when searching for rental accommodation. You can take the stress out of connecting with likely tenants by turning to a local letting agent in Finchley.
If you want to make an informed decision in and around Finchley’s lettings market, we are here for you. If you have any questions about the local rental market, or you need assistance, please contact David Harris & Co today. Call us on 0208 346 9122.
