Around 700,000 young people in the UK aged 18 to 34 cannot get onto the renting ladder says new research. The study from credit report provider Noddle says that most tenants have to save for four months for the necessary rental deposit and, even then, still may need to rely on guarantors to secure a home.
Propertywire reports that rising deposits and rents, landlords not wanting young tenants, and poor credit histories all make it a struggle for them to get on to the rental property ladder.
Across the UK, average rental deposits in the private rented sector are £970 (in London they are £1,831) and average rental payments are £927 per month (£1,593 in London) - around 3% higher than a year ago.
Lack of or poor credit history
The study says that landlords and letting agencies are often rejecting prospective tenants because of their credit history - particularly London where 16% of young people are refused a tenancy on these grounds.
Jacqueline Dewey, from Noddle, says: “Our latest research suggests that it’s not just buying property that’s become increasingly difficult for young people today, as renting is also out of reach for many. As demand for rentals becomes greater, especially in the big cities, landlords can pick and choose who they want in their properties.
“Credit checks are becoming more and more important in the tenant selection process. We hope by raising this issue, we can help young people achieve their financial goals and get the property they desire”.
The article highlights that young people trying to get on the rental property ladder should:
- have some bills or other sources of credit in their name such as a credit card or mobile phone, as a potential landlord cannot assess their credit worthiness if they’ve never had credit;
- ensure all financial products are tied to the same name and address;
- pay their bills on time. Missing a payment can impact on a credit score;
- be on the electoral roll as this helps provide proof of address.
Good money management can also be proved to landlords by keeping credit balances low while using some credit every month and paying off the balance on time.