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Tenants need an average of £1,469 to cover the cost of moving rental property according to a new survey.
Post Office Money’s Cost of Moving study compiled by the Centre for Economics and Business Research (CEBR) has found that tenants are using the majority of their cashable savings to cover the average cost of moving.
Renters need to have an average of £1,469 saved to cover the costs of moving including the security deposit (£944) and moving costs (£525) and on average have £1,522 in cashable assets available to them.
However, it was found that 53 per cent of 22 to 29-year-olds saved no money in a savings account, so many young renters will have no savings set aside to cover these costs at all.
Moving can place significant financial pressure on renters, with deposits accounting the bulk of the cost of moving as a renter (64 per cent), £944 on average, ranging from £1,629 in London to £526 in the North East.
While renters will expect to see these costs refunded at the end of their tenancy, they will likely need to wait until after they have moved out to recoup the cost. As such, renters who do not want to deplete their savings will need to set money aside specifically for their next deposit in order to make a move.
The cost of moving has increased by 13 per cent for renters over the past decade. However, upcoming changes such as those made in previous Budget announcements by the Chancellor, may see costs ease for both buyers and renters
The Government has proposed a ban on letting agent fees under the Tenant Fees Bill, which is likely to come into effect in 2019. Agency fees make up a significant amount of the cost of moving as a renter (16 per cent – £235).
Chrysanthy Pispinis from Post Office Money commented: ‘Moving can be a time of financial pressure and people will often need to draw upon any savings they have. However, they are unlikely to have ear-marked this money specifically for moving, leaving them with no financial safety net.’
She continued: ‘Having a regular savings habit – putting money aside on a ‘little and often’ basis – can help with these unforeseen costs.’
Cost Breakdown for Moving as a Renter
£944 – Security Deposit
£235 – Agency Fees
£123 – Self Van Hire
£ 87 – Child Minder Fees (10 hours)
£ 80 – Moving Materials
£1469 – Total Moving Cost