Deck is stacked against private tenants, says industry supplier

One of the biggest names in the deposit alternative sector says the rental market is “stacked against” private tenants.

Gary Wright, chief executive of deposit alternative service flatfair, says a recent analysis of the housing market by Zoopla shows that overall, an average property in the UK requires a renter to have an income 17 per cent higher than a mortgage holder to live in it. 

And in the North East, a renter needs to have double the income of a mortgage holder. 

Wright says: “Even with interest rates creeping up, it’s still significantly cheaper to pay a mortgage than it is to rent. The issue is upfront capital – many renters struggle to find the deposit needed to buy a home.

“So why do we expect these same people to find five weeks’ rent – a huge sum, particularly in major cities – for a tenancy deposit? Payment technology has evolved past this point. We should be raising consumer awareness of deposit alternatives on the market, particularly as the cost of living crisis bites.” 

Richard Donnell, director of research at Zoopla, says: “The housing market has been resilient to the rising cost of living so far. The new energy price cap will add to the pressure facing households especially those on lower incomes. We see the recent jump in mortgage rates having a greater impact on housing market activity and prices moving ahead.  

“First time buyers on lower incomes, those looking to trade-up using a bigger mortgage and buyers in the south east of England will all feel the greatest impact on affordability.

“We expect a growing number of households to continue to re-evaluate their homes as a result of ongoing pandemic factors and with further impetus from the rising cost of living. This will support overall sales numbers but the rate of price inflation will continue to slow.”