The cost of living has risen dramatically in recent months, with rental and energy prices seeing some of the highest increases. So, how does this impact tenants?
Energy Price Rises
Energy prices have risen by 54%, with another significant rise in prices predicted in autumn. Many households now must look for clever ways to reduce their gas and electricity bills by using less energy.
Cost of Living Increases
UK inflation has now hit a high of 9%, which is the highest level in 40 years. However, economists report that this number is 10.9% for lower-income households.
Senior economist Jack Leslie said, “these recent drivers of inflation mean that lower-income families are facing the most severe cost pressures, with their inflation rate already hitting double digits. Inflationary pressures are likely to continue to grow through the year as the effects of higher energy prices continue to work their way through businesses and into consumer pockets” [source].
The cost of food has risen, with the food inflation rate being 6.7% – the highest in ten years. There have been double-digit increases for things like pasta, milk, and poultry, all of which are household staples and therefore have a significant impact on the cost of a weekly shop.
On top of this, the price of transport, clothing, footwear, household items, and household bills (broadband, phone bills, TV bills, etc.) have all risen too.
Rent Price Rises
According to the ONS, the average rental price across the UK in the 12 months to February 2022 rose by 3.2% outside of London [source]. This increase has been growing at the fastest rate for five years and property website Zoopla reported that the average rent jumped by 8.3% in the last three months of 2021 to an average price of £969 per month.
Many tenants will now require guarantors as affordability ratios shift in reference to these. Many people are calling for government action to help those struggling to pay their rent and bills and keep food on the table.
Darren Baxter from the Joseph Rowntree Foundation said that “renters searching for a new tenancy will struggle as rents in some areas have risen as much as 8%. Despite this, housing benefit has been frozen for two years. To address this, the government must urgently relink housing benefit to the real cost of renting” [source].
So the combination of these increases will negatively impact the outgoings of a typical renter.If you’re a tenant looking for a new home, let Northwood help you. Contact us today on 01985 220 290, email warminster@northwooduk.com or pop to our offices on Market Place in Warminster. We’re open Monday to Friday from 9 am until 5 pm, and Saturday from 9:30 am to 12noon.
