Interest rates increased in the UK again on 23 March 2023 by 0.25% to 4.25% which will have a further impact on tenants and landlords alike.
For Tenants it can obviously mean a rent hike if a contract is coming up for renewal or you are looking for a property at this time as the Landlord may look to pass these extra costs on.
This can be added to other costs where a Tenant is already suffering severe hardship.
As well as rent increases there will be additional charges on other interest-bearing accounts such as credit cards.
One of the cheapest ways to rent in the UK is to rent a room as costs are shared by all tenants in the property or indeed with the home owner. Additionally, bills are usually included in the monthly rent, reducing overall costs and allowing easier budgeting.
Renting a room is therefore more cost effective and can be an ideal solution for many single people, students or those moving area and looking for a temporary, cost-effective solution.
Landlords Costs
Landlords will also be affected as cost increase on their properties or their own house in addition to all other costs.
A large proportion of Landlords are home owners renting rooms or a second home where they may have up or down scaled but retained the previous property for a residual income or to provide pension pot. In most cases they aren’t affluent and any increase in cost that can’t be passed on can have a serious impact on their finances. In many cases they are ‘accidental landlords’ and not set up as profitable businesses.
For those landlords currently on fixed rate, buy-to-let mortgages, they will have further concerns as rates and monthly payments could jump significantly once those fixes come to an end. Unlike residential home owners, there is less availability of buy-to-let deals currently on the market so costs will be significantly higher on a variable rate or new fix.
Many home owners will be become landlords simply to bring in additional income to make their home more affordable by renting out a room. This can be a really good way to bring in extra monthly income to cover the costs of increased food and energy costs. In many cases these ‘landlords’ will be suffering financially and only decide on this option as a last resort as they are giving up a significant amount of privacy in return for the monthly rent.
Are there other options to help with debt?
We recommend a friendly chat with X-debt, who deal primarily in Individual Voluntary Arrangements which can be a solution to debt problems. However, they will discuss your situation and signpost you to other debt solutions if they think it is practical or an IVA isn’t the right solution.
Please feel free to give them a call as soon as possible if you are struggling to meet your monthly rent, mortgage, loans or other commitments. You can call during normal office hours on 0161 787 3400 and they offer free, no obligation advice.
How to Rent a Room
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