0:01 AM, 24th December 2024, About 14 hours ago
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More than 73% of tenants claim to feel more financial strain during Christmas, as they struggle with the cost-of-living crisis.
According to Zero Deposit, expectations to spend more during Christmas and New Year on outgoings such as social occasions and leisure activities mean many tenants are tightening their belts.
However, Zero Deposit claims more investment in the private rented sector rather than more legislation is needed to help combat the financial strain.
According to Zero Deposit, 65% of tenants struggle with the cost of living once they’ve covered the cost of rent and other outgoings such as utility bills.
With the average monthly net income currently standing at £2,634, this means that 67% of a tenant’s monthly earnings go towards the cost of their rental property.
Once these costs are accounted for, 74% of renters surveyed by Zero Deposit report that they struggle to afford other expenses such as social occasions, leisure activities, and non-essential purchases during the festive period.
Zero Deposit claims that 66% of tenants plan to cut back on their usual festive spending, including purchasing gifts for friends and family.
It’s not just tenants feeling the impact of the cost-of-living crisis — many landlords are also concerned about rising costs and changes in legislation. According to the English Private Landlord Survey, half of landlords earned less than £20,000 in rental income in 2024, while costs continued to increase.
Financial pressures are becoming more evident, with around three-fifths of landlords carrying some form of borrowing on their properties. The most common type of borrowing is fixed-rate interest buy-to-let mortgages, preferred by 69% of landlords.
A separate survey by Savills also reveals that 41% of landlords have significant concerns over energy-efficiency changes. Ed Miliband has announced all private rented properties must meet an EPC C target by 2030.
According to the survey, 40% of landlords would spend up to £2,000 improving a property’s EPC rating.
However, landlords could face having to pay double that, with research by epIMS showing that upgrades could cost as much as £8,000.
Sam Reynolds, CEO of Zero Deposit, says the government must focus on trying to invest in the private rented sector rather than deterring landlords with more regulation.
He said: “The rental market can be a tough place to be at the best of times, let alone during Christmas, with tenants required to pay a significant chunk of their monthly earnings simply to cover the costs associated with a rental home.
“Unfortunately, there’s no quick fix and the market imbalance between supply and demand has continued to push the cost of renting up over the last year. Rather than encourage more landlords to the sector to help ease the current rental crisis, the government has remained consistently intent on deterring them via a raft of legislative changes in recent years.”
He adds: “Of course, Labour’s pledge to deliver 1.5 million new homes could help to ease the current rental crisis, but that’s only if the government actually delivers and history has shown us that housebuilding targets are rarely fulfilled.
“This trend looks set to continue in 2025 and so whilst this Christmas may be looking bleak for many tenants across the rental market, it could well get worse come this time next year.”
