Landlords

Cost of renting increases by 94% for some furloughed tenants

Property Reporter
|
15th May 2020
Tenants Gutted 211

Rental deposit replacement scheme, Ome, has announced that it has brought forward the launch of its free to use Rental Wellbeing Helpline this week, as the company’s latest research highlights the sharp increase in the cost of renting for many furloughed UK tenants.

Ome’s research on furlough rental affordability looked at the change for furloughed tenants based on the increase between the percentage of monthly net income normally required to cover the cost of renting, and the percentage of income required for those now receiving just 80% of their wage on furlough; or a furlough wage cap of £2,500 per month on their gross earnings.

The data shows that with the average UK rent at £959, the average tenant was paying 47% of their monthly net income to cover the cost of renting. However, those on furlough are now paying 57% of their income to cover the cost of renting - an increase of 10%.

This increase doubles in the capital where tenants were already paying a hefty 64% of their net income on renting, however, those now on furlough have seen this cost increase to account for 85% of their monthly income; a jump of 20%. It is no surprise that London accounts for 12 of the 15 areas to see the largest jumps in furlough rental unaffordability.

The worst is Kensington and Chelsea where a furlough reduction in monthly income means renting now accounts for 152% of the average wage, a huge jump of 94%. Westminster (+76%), Camden (+52%), Richmond (+43%), Hammersmith and Fulham (+40%) and Wandsworth (+39%) have also seen some of the largest increases, with rent now accounting for upward of 93% of income for those on furlough.

Outside of London, Elmbridge has seen the percentage of income spent on renting increase from 51% to 89% for those on furlough. Sevenoaks (+23%), St Albans (+21%), Guildford (+21%) and Chiltern (+19%) have also seen some of the largest jumps for furloughed workers outside of the capital.

For those concerned about how they are going to pay the rent, or for those with any other worries around their current rental situation, Ome has brought forward the launch of their Rental Wellbeing Helpline.

The helpline gives any tenant who has downloaded the free Ome app access to a free legal helpline to receive advice on any legal or debt-related matters. The helpline will also provide a free counselling and health information service for those who may be suffering with their mental or physical wellbeing.

You can download the free to use Ome app and benefit from their free legal helpline via the below links for both Apple and Android.

Apple: https://apps.apple.com/us/app/ome-deposit-replacement/id1489447338

Android: https://play.google.com/store/apps/details?id=com.hamiltonfraser.ome&hl=en

Matthew Hooker, Co-founder of Ome, commented: “Rental affordability can make concerning reading at the best of times, so those who have found themselves furloughed through no fault of their own will likely be feeling the squeeze where their finances are concerned.

"As a result, we’ve brought forward the launch of our Rental Wellbeing Helpline to provide a resource for advice and information for those worried about their current situation. The helpline will provide free access to advice for those struggling with legal or debt-related issues, but also a counselling service for those that are struggling with their mental or physical health during the lockdown.

"While this launch was always on the Ome roadmap, we’ve accelerated its delivery as we felt it was pertinent in the current landscape. Whatever your rental worry, there’s plenty of help on hand across the industry and so we would urge any tenants with questions, queries or concerns to share their burden with people that can help.”

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