Even renting is out of reach for over 700,000 youngsters

You’ve probably heard that home ownership is out of reach for many young people in the UK, but did you know that renting is often off the table too?

We recently discovered that rising deposits, souring rents and landlords discarding those with poor credit scores are making renting impossible for more than 700,000 18-34 year olds[1]. This means that lots of people in the UK are stuck living with their families for longer than they’d probably intended to (1 in 6).

Rental deposits on the up

According to the Centre for Economics and Business Research, the average deposit for a rental property is now £970, rising to £1,831 in London[2]. As a result, our research showed that it takes the average youngster around four months to save up for the deposit – not ideal if you need to make a quick move[3].

Rising rental payments

Average rents in the UK have risen by almost 3% over the last year[4] and now stand at £927 per month (£1,593 in London). For many, this isn’t affordable, especially when you consider the fact that the average salary for someone with between 5-9 years’ experience is £30,732, dropping to £23,689 for 1-4 and £20,295 for 1 year[5].

Credit score rejection

In London, 1 in 6 youngsters have been rejected for a property because of their credit score. In fact, across the UK, many people miss out on several of their preferred properties because of their credit score[6].

“As demand for rentals becomes greater, especially in the big cities, landlords can pick and choose who they want in their properties,” Noddle MD Jacqueline Dewey explained. “Credit checks are becoming more and more important in the tenant selection process.”

And it doesn’t stop there…

Renters may find that rejection isn’t just a one off, it’s more of a pattern. 10% of youngsters have been turned down by up to 3 landlords and if they are made an acceptance offer, they are often asked for a guarantor (39%), a higher deposit (15%) or more upfront rent (6%) than previously advertised.

Getting out of the rental rejection spiral

All hope isn’t lost for the UK’s would-be renters, however, because there are things you can do to improve your credit score and increase your chances of being accepted for your dream property.

Simple tips to boost your score include:-

  • Get on the electoral roll
  • Get some bills in your name , such as an electricity account or a mobile phone contract
  • Take out a manageable about of credit
  • Try to keep your credit balances at around 25%
  • Pay your bills on time
  • Check your credit report and score regularly

To learn more, read our blog on how to improve your credit score.

 

[1] Noddle commissioned Opinium to ask a series of questions of renters and landlords, polling 2,004 nationally representative sample of UK adults (18+). The polling ran between 10th-13th November 2017.  The headline figure was calculated using the following formula: UK population (18-34) according to ONS 2017 estimates 14,747,810 million people. Dividing this figure using Noddle’s latest research by the 5% of 18-34 year olds that said “At the moment, renting is now impossible” equals 737,390

[2] Centre for Economics and Business Research (Cebr) and Deposit Protection Scheme (DPS) figures

[3] Using Noddle’s data, this was calculated through finding the average amount of time respondents said they had to save to pay a deposit for a rental payment.

[4] September 2016-September 2017, HomeLet Rental Index

[5] https://www.monster.co.uk/career-advice/article/uk-average-salary-graphs

[6] Noddle commissioned Opinium to ask a series of questions of renters and landlords, polling 2,004 nationally representative sample of UK adults (18+). The polling ran between 10th-13th November 2017.