You receive a text from your landlord advising that they need to increase your rent payments due to the impact of the cost of living crisis. At the same time, your monthly energy bill arrives. Opening your banking app, you begrudgingly transfer more money from your savings account to make ends meet.
With the cost of living crisis still impacting our everyday lives, this may seem like a familiar scenario. In fact, we’ve recently completed a survey of 1,000 respondents to reveal that one in four (25%) UK-based adults have seen an increase in their monthly housing costs due to the cost of living crisis.
Whose monthly housing costs have increased?
Though this is quite a large portion of respondents, it’s still a somewhat mixed bag overall. 12% of respondents reported no increases to their rent, while 17% reported no increases in their mortgage payments, meaning that 29% – a third of all respondents – have not seen a change in their housing costs. An additional 7% said that payments had stayed the same, but they expected increases in the next year or so.
Of our 1,000 respondents, 40% said they do not pay rent or have a mortgage. However, one-third (31%) of respondents aged 25-39 reported an increase in their rent or mortgage payments, with 26% of those aged 40-59 saying the same. One in 10 of those aged 60+ have seen an increase in their monthly housing costs.
Is moving to cheaper accommodation the answer?
In particular, those living in rented accommodation might question whether moving into less costly accommodation would effectively reduce the impact of the cost of living crisis. After all, while this may include some initial costs to cover aspects like deposits, storage, removals and so on, an overall reduction in rent payments might afford a little breathing room in the long run.
One in ten (16%) of our 1,000 respondents stated that they had considered this option. In those aged 25-39, this figure rises to 25%, yet falls to 14% in those aged 40-59.
Despite these overall numbers, only 3% of all participants report taking action and moving to a new property.
Limiting spend in other areas
If moving home isn’t the answer to fighting the impact of the cost of living crisis, what measures are people taking to cut back?
Our survey respondents spoke, and nearly half (49%) are limiting water, gas and electricity use to combat energy prices, while reduced lifestyle spending takes the second highest spot at 38%. A quarter of respondents say they’re using savings to make ends meet, while one in ten (11%) said they’d taken on extra hours at work. Perhaps surprisingly, almost a third (27%) of respondents said they hadn’t made any changes, despite the present rise in living costs.
Are these everyday sacrifices paying off?
Overall, 24% of our study’s respondents stated that from all the cutbacks made to their spending, they had only seen monthly savings of up to £50. A smaller proportion of 13% had seen slightly higher returns of between £50-£100, but less than 10% of respondents reported making savings higher than this.
When asked if these changes (and savings made) had eased the impact of the cost of living crisis, only 13% said it had considerably reduced impact. A more significant 26% reported that it had “somewhat” eased impact but that they were still struggling. Almost a third (28%) said it had made no difference.
When it comes to saving money, most trust their instincts
Across all survey participants, 65% say that they have trusted their instincts regarding the cost-saving measures they’ve implemented to reduce spending. In fact, only 1 in 10 respondents said they had taken advice from online news articles or personal finance experts. As our study has perhaps shown, however, current cost-cutting hacks aren’t necessarily making things better. So what’s the answer?
Commenting on these findings, Director of StorageX, Marcin Markiewicz states:
“Based on these findings and given the present economic situation, it’s clear to see why the mayors of Manchester, Liverpool and London have recently called for rent freezes. With over half of respondents to our survey cutting down on gas and electric usage – as well as other lifestyle expenses – it’s concerning to see that these efforts seem to be generating such low financial returns. I’d imagine that many might feel as though they’re fighting a losing battle.”
On the subject of moving home in order to reduce expenditure on rent or mortgage payments, Markiewicz added “it’s understandable that moving may not seem an attractive option at this time, but we at StorageX have begun to see an increase in demand for storage, potentially due to the need to downsize and save on mortgage and rental payments”.