Ome: Deposit accounts for 118% of average salary for young tenants

Jessica Nangle

February 6, 2020

The average tenant deposit accounts for 118% of the average salary for 18-21 year olds according to research by Ome.

The tenant deposit replacement scheme looked at the cost required to secure a rental property for a variety of age groups.

The scheme also looked at how this cost translates into a percentage of monthly net income for tenants of each age demographic.

The average rental deposit is £1,139, which is 68% of the average net salary for 22-29 year olds.

The latest English Housing Survey shows that over the past decade there has been a significant increase in the number of people aged 55-64 living in the rental sector.

This also coincides with a fall in the number of people owning their own home in this age group.

Ome’s research shows that those aged 60 and above would be required to spent the same proportion of salary to secure a rental property as those aged 22-29.

For those aged between 30 and 59, it would require around half of their net monthly income to pay their rental deposit.

Matthew Hooker, co-founder of Ome, said: “There are many tenants who are financially able to opt for the traditional deposit path when renting and for many it is a more preferable route, allowing them to pay there and then without any ongoing commitment or costs.

”That said, as our research demonstrates, it can provide a tricky obstacle and while it might not be such as issue in the long-term, it poses a cash flow problem for those required to stump up as much as a month’s wages in one hit.

”Of course, those in the youngest age groups tend to be on the lowest wages and as a result, have to pay out more of their monthly wage on a deposit, but more often than not they have a support network of family that can help them start out on their rental journey and contribute to some of the costs.

”However, this isn’t always the case for those 60 and above who may be on a lower wage and don’t have the option to borrow from friends or family and addressing this issue has been one of the driving factors behind the launch of deposit alternatives such as Ome.”

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