With many of us still restricted to working from home or on furlough, research by deposit replacement scheme Ome, shows the average UK commuter is saving £66 a month that would have otherwise been spent travelling to and from work.
Now that the market has reopened for business, tenants will be looking to move to rental properties after being restricted since the end of March. However, the financial barrier of securing a rental deposit at a cost of five weeks rent will have increased for those on furlough or unable to work.
The silver lining is that the three months of travel costs saved by being a furloughed commuter could help to boost their finances by £199. While this won’t pay the rent, it will account for 18% of the average rental deposit of £1,107.
This benefit is highest in the North East, where a three month commuter saving of £212 could pay 35% of the average rental deposit.
The average commuter saving in the North West (25%), Yorkshire and Humber (24%), East Midlands (24%) and West Midlands (23%) would also chip away more than 20% of the average rental deposit.
This boost is predictably lowest in London, but with the average commuter cost accounting for 12% of the average rental deposit, it’s certainly better than nothing.
At a local authority level these cost savings become even more notable. The biggest boost is in Wales, where three months of commuter outgoings accounts for nearly half of the average rental deposit in Blaenau Gwent, while in England, this saving accounts for 39% of the average rental deposit in Middlesbrough, 38% in Northern Ireland’s Fermanagh and Omagh and 32% in Dumfries and Galloway in Scotland.
Today, deposit replacement products such as Ome provide an alternative option to overcome the initial upfront cost of a rental deposit. For the average UK tenant opting to take this route, three months of commuter cost savings could also help reduce ongoing rental costs, covering 24% of their first months rent.
Again, this is highest in the North East where three months of money saved as a result of working from home could cover 43% of your monthly rent, with London again the lowest at 15% of the average monthly rent.
Co-founder of Ome, Matthew Hooker, commented:
“Now that there is an element of normality returning to the rental market in an operational sense, many tenants who needed to move may now be eager to do so.
However, the reality of a lengthy lockdown will mean many have seen their finances shrink meaning that housing affordability may be more of an issue that it previously was.
One potential silver lining is that the cost of living will have reduced for those no longer commuting on a daily basis and this can be quite a sizable sum of money. While it might not pay the rent outright, it will certainly help contribute to it or to an initial rental deposit.
In the current climate, tenants will be doing all they can to reduce their outgoing and saving on commuting, social activities and holidays should help with this. Products such as Ome also offer an alternative way to manage their rental outgoings with a far smaller upfront cost and a more manageable monthly fee.
Those currently looking to move who are worried about their financial situation should do their research to maximise any reduction in upfront and ongoing costs. There is plenty of advice readily available in the sector as well as plenty of products that can also help with other areas such as utility costs.”