UK Housing rent deposits rise 50% since 2007

Deposits that tenants have to pay landlords have jumped by 50% to £900 since 2007, even though wages are up just 13% in cash terms, according to official figures that come amid demands from campaign group Generation Rent for an overhaul of Britain's creaking private rental market.

The Deposit Protection Service (DPS), a goverment-authorised body that looks after £900m in deposits on behalf of 390,000 landlords and many more tenants, said that since it began operating in 2007, the average deposit has risen from £600 to £900, with landlords typically demanding six weeks' rent rather than the traditional one-month deposit.

Yet over the same period, average earnings in the UK have grown from just £457.60 to £517.50 a week, with almost no real growth once inflation is taken into account.

"We have also seen the average deposit amount increase from approximately £600 in 2007 to nearly £900 in 2013. Clearly rents have risen over the years which will obviously impact deposits. We suspect that since the introduction of TDP [tenancy deposit protection], landlords have realised that four weeks' rent is not a sufficient size deposit, so have increased it to six weeks," said the DPS.

But struggling tenants are finding that landlords are willing to offer longer rental periods, with the typical property now taken for nearly two years rather than one. "Since we launched in 2007, we have seen the average tenancy period rise from around 12-14 months to 22 months. This trend adds weight to the calls for longer tenancy agreements. There is clearly a need for families to put down roots and having the security of a longer tenancy would give them that peace of mind."

A "renters manifesto" launched by Generation Rent today is calling for tenants to be given the right to demand a five-year tenancy, plus a national register of landlords, to help government improve standards and tackle rogue landlords. It also wants new "decency standards" for rental properties and checks that landlords are meeting them.

Alex Hilton, director of Generation Rent, said: "Private renting is a second-class tenure, treated by government more as an investment vehicle for a small minority than a place to live for nine million people. Despite policies to help renters into home ownership, the majority of us will be renting for many years to come. We need a place we can call home – something that owner-occupiers take for granted.

"Long-term tenancies benefit both tenants and landlords who can not only better plan their finances but work together without suspicion to keep the property in good repair. The next government must enshrine the right to a long tenancy into law, otherwise letting agents will simply block them and continue to cream off renewal fees."

Generation Rent is also calling for a £1bn strategy to build 10,000 homes on state-owned land and sold leasehold at near cost price. Properties would be sold to owner-occupiers on the condition that any future sale price would not rise by more than inflation, and to landlords on the condition that rents would be controlled. The proceeds of the sales would continue to finance the building of more houses under the same model, it said.

The cost of housing benefit has spiralled to £21bn a year in England alone, with tenants and local authorities caught in a rental price spiral. Generation Rent said the money would be better spent building public housing rather than being pocketed by private landlords.

"The cost of housing is the single biggest threat to living standards in the UK. High private sector rents are stopping people from saving for their future and putting pressure on the public purse. A new, properly funded Department for Housing could double the rate of house building and keep a lid on a welfare bill that has become a subsidy for private landlords," said Hilton.

Source:The Guardian(UK.)