Why Are Rental Homes in the UK So Expensive?

Did you know that renting a home in the UK is actually more expensive than actually purchasing one? According to research, buying a home is now about £1,400 a year cheaper than renting. This is quite unbelievable, but this is the reality that people have to face. Nevertheless, doing enough research about the average rental home ratings in a particular area in the UK can help you find the most affordable and reasonably-priced house for rent.

Why Are Rental Homes So Expensive?

The gap between the prices of homes for rent and homes for sale has increased partly because of house price falls along with very low interest rates. As a result, borrowing money to purchase a property has become easier and more accessible to those who can manager to get a mortgage.

On the other hand, many people are still having a hard time raising a deposit for a new home, and others just can’t meet the borrowing criteria of lenders. This gives them no other choice but to rent a home instead. This trend is what has pushed rental costs up.

One study revealed that purchasing a three-bedroom house comes with an average monthly cost of £620 just last year, and surprisingly, this is cheaper by a huge £130 than the average rent of £750 for the same property. When we say average buying costs, this should include mortgage payments, expenses for repairs, and income lost by using the money for deposit instead of having savings.

Are Average Rental Rates Still Increasing?

Findings from the Homelet Rental Index indicated that growth in rent prices is inevitable. As a matter of fact, it was recorded that by February 2015, the rental rates in 7 out of 12 regions across the entire UK actually went up. Meanwhile, the rent prices in London remain static.

The average rate of rents in the UK now is at £899 per month, in comparison to the £889 rate at the end of January 2015, and £873 in December 2014. The North East and South West had the biggest increase in rent price growth in 2015 to date, which increased by 6.2% and 4.5% respectively.

Will There Be Change?

We all certainly hope there will soon be a change in this ever-rising property rating, but there is just no guarantee that rental homes in the UK will be more affordable. Perhaps the best thing you can do is try to find a rental home that will suit your budget.

When it comes to renting a home in London and other regions in the UK, it is highly recommended that you use a rated home service like ratedrents. With ratedrents, you will know what the average rental rate is according to the region. This way, you can easily find a property that will suit your lifestyle, and more importantly, your finances.