Research published today reveals the huge sums of cash tied up away from the UK economy by rental deposits held for the UK’s 4.6 million tenancies.
Landlords hold a record total of £5.2 billion in tenant deposits via the three government-approved schemes, or an average rental deposit of £1,139 for the UK’s 4.6 million tenancies.
These figures are for 2019 and have been published by alternative rental deposit service Ome.
They reveal both how quickly the private rented sector is expanding as generation rent delays or gives up on their dreams of home ownership, and rents rise.
Over the last ten years the slice of the private rental market taken by the private rental sector has increased by 16% to 20%, or approximately 3.5 million more people.
During the same period average rents have risen from £663 to £886 a month.
But this will decrease next year when the full 2019/2020 English Housing Survey figures are published, which will take into account the new cap on rental deposits of five weeks’ rent, brought in by tenant fees ban last year in England and Wales.
Ome says the huge size of the rental deposits pot dwarfs the amount of money invested in many key UK industries, underlining the amount of cash tied up in the rental sector.
For example, £5.2 billion is larger than the money invested last year individually in hotels and restaurants, clothing manufacturing and food and drink factories.
Matt Hooker, co-founder of Ome, says these comparisons “demonstrate the huge sums being held by landlords and agents and the sheer size of financial security the nation’s tenants must collectively put down when looking to rent”.