According to new research, the cost of renting rose twice as fast as wages last year. At the end of 2015, the cost of renting was an average of £1,280 a month, an increase of 4 per cent on 2014. In comparison to wages, the average earnings rose by just 2 per cent to £1,874 during the same time period.
Those figures are representative of the UK as a whole, meaning they include London house prices. If you take London out of the equation, the average rent at the end of 2015 was £733 a month, but that’s still a 3.4% increase from 2014.
The research found that those renting three bedroom properties saw the biggest increases to rent over this time, with an increase of 5 per cent to £1,484 on average. Commuter hotspots such as Luton and Medway saw the biggest increases in rent with this jumping by 11 per cent and 9 per cent respectively.
You’re likely to find these figures disheartening if you are looking to rent or are currently renting, but there are a couple of things that you can do to save on renting:
1) Share with others
If you’re looking to find a new place and cut down the cost of renting, then opting for a house share could be just what you’re looking for. In fact, a report by PwC claims that by 2025, 60 per cent of 20-39 year olds in England will be renting their homes – and it’s no wonder with the price of rent continuing to increase.
By moving in with other people, you’ll be able to split the cost of the rent with your housemates. Depending on the arrangement that you come to, you could even split up the common bills as well – these include council tax, gas and electric, water as well as TV licence, phone and broadband payments.
You can read more about managing your finances in a house share in our blog.
2) Find a cheaper area
For those of you living in the capital, it will come as no surprise that London had the highest average monthly price of rent last year at £2,047. With that said, the price that you pay for rent can fluctuate depending on where you rent in London.
The further you move away from the city centre, the more the prices can decrease. So you could shave hundreds of pounds off your rent each month, just by moving out of the centre and into the outer areas. The cost of what you’d spend on getting the Tube to work is often much less than the overall savings you’d gain by moving – so it could be well worth looking into.
3) Become a property guardian
If you don’t mind living in a property that’s slightly more unconventional, you could find becoming a property guardian is ideal for you. A property guardian is basically someone that lives in someone’s property in return for reduced rental costs – typically around a third of local rents. In most cases this includes bills and council tax as well.
Just bear in mind that guardians have fewer rights then tenants, so you may not be given much notice to move out. You will have to pay a deposit and keep the property in good condition as well. To find out more about this, check Camelot’s website.
4) Switch your bills
When renting, you shouldn’t feel as though you have to stay with the energy supplier that the previous tenant was set up with. Switching to another supplier could see you save and help to ease the cost of paying your rent each month. Just keep in mind that some tenancy contracts tie you into a certain gas or electrical supplier, so check this first.
If you’re able to switch, check with a price comparison site to see if there’s a better deal out there for you – now could be a good time to switch with E.ON announcing cuts to their standard gas prices, others could be more likely to follow suit.