Slowly Does It
More tenants in the UK are paying six months or more rent in advance.
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Each year since 2008, the proportion of tenants paying at least six months’ rent upfront has increased to reach five per cent in 2015. Traditionally tenants paying rent upfront have been found in the most expensive areas of London, with wealthy tenants having the cash to pay in advance. In the last 12 months 11.5 per cent of tenants in Kensington, Chelsea and Westminster paid six months’ rent up front on starting their tenancies, putting down an average of £51,000.
While the numbers of those who pay six months or a year’s rent in advance in London’s most exclusive enclaves have grown, they still remain a small part of the rental market in the UK. The uplift in renters paying in advance has been most apparent in the more expensive areas of our larger towns, generally those with sizeable student populations. For students, the self-employed, or for anyone on a variable income, paying rent upfront is a way of making themselves more attractive to a potential landlord to secure the home they want.
Canterbury, Coventry and Guildford have all seen a sizable uplifts in the numbers paying in advance prior to moving in. Rising student numbers, including a 30 per cent rise in overseas students studying in the UK between 2007 and 2013, have increased demand for student housing. More students are choosing to live in the mainstream private rented sector, offering landlords with less experience of letting to students the rent upfront. They are part of a growing band of affluent tenants for whom renting is almost always a relatively short term lifestyle choice. Last year just 15 per cent of those who paid a year’s rent upfront renewed their contract once it expired, compared to around half of all tenants.
Tenants willing and able to pay a large proportion of the rent up front are far from representative of the typical private rented sector tenant. Despite growing in number, they remain restricted to a few markets. While those who do put down six or 12 months’ rent in advance are understandably attractive to any landlord, paying upfront shouldn’t be in lieu of thorough referencing and a proper contract.
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