Buy To Let Updated:
Have you ever had your rent increased at the end of your tenancy agreement? According to research from Ocean Finance, many people have seen their rents rise substantially if they embark on a new contract, and the fees for arranging a new tenancy can be another blow to renters' wallets.
The figures show that 60% of respondents saw the rent increase on their current property at the end of their tenancy agreement, and 13% have also been hit with fees to extend their existing contract. Landlords increased rent by an average of £84 per month - £1,008 per year – at the end of each tenancy agreement, while the charges for renewing a contract can rack up to an average of £117.
Given that over half of tenants surveyed stayed in the same house for five years or more, this could see them pay almost £600 in letting agents' fees to continue living in their rented home, while the extra rent charged could take a significant toll on the family budget.
Much of these increases could be due to rising demand for rented properties as people struggle to get on the housing ladder, and that, combined with an ongoing lack of supply, means "landlords are in a strong position to continue to increase rents each time a tenancy agreement ends", said Gareth Shilton, Ocean's spokesperson.
"The buy-to-let market is booming at the moment, driven partly by the London market, although there are strong hotspots across the country," he said. "But on top of rental increases, tenants are facing rip-off fees from letting agents, not just to take new tenancy agreements, but also to roll-on an existing tenancy for another six or 12 months."
Given the expense, it's no wonder that so many tenants find it tough to get on the housing ladder. Being faced with annual rent hikes could understandably make it difficult to save enough for that all-important house deposit, but if you've got dreams of owning your own home, there are things you can do.
First of all, start saving whenever you can, because even if you can only stash away a few pounds a month, it can soon add up. Instead of buying that daily coffee, for example, transfer those extra pounds into an easy access savings account and you'll soon be able to watch the pot grow!
Be ruthless with your spending, and make the most of things like voucher codes and discounts to make your money go further. Remember that you don't need a significant deposit fund, either – thanks to the growing availability of first-time buyer (FTB) mortgages, you only need a 5% deposit to realise your dreams. Then it all comes down to finding the right deal to suit! Rates are at record lows (and first-time buyers can benefit even more), so compare the options and hopefully you won't need to see any more rent hikes.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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