Personal loan customers alerted to rent increases

Financial Services > Personal Loans > News

Fri, 02 Mar 2007

Rents have increased by almost a fifth over the last year, in news that could indicate increased demand for personal loans from tenants struggling to make ends meet.

According to figures from mortgage specialist Paragon Mortgages for its buy-to-let mortgage index, the average rent increased by 17.2 per cent in the 12 months to January 2007.

And Nigel Terrington, chief executive of the mortgage provider, has suggested that the recent spate of interest rate rises may be contributing towards increased rental demand, since first-time buyers are deciding to delay entering the property market over mortgage repayment concerns.

It effectively means that buyers of first homes are competing with students, young professionals and immigrants to find rented accommodation, he added.

"Demand for properties in the private rented sector remains solid, which is feeding through into higher rents," he added.

On top of the outlay on accommodation itself, renters must also typically pay for a number of other services.

These include water supply, gas and electricity supply, council tax and TV licence bills - which may prompt some tenants to arrange low-rate personal loan deals to cover the costs.

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