Renters face higher inflation than homeowners

Posted 2007-10-29

Information released by the Alliance Trust has shown that increasing rent costs tend to strain people’s financial standing. Whether young or old, in real terms of over-all inflation and cost of living increases, homeowners face less financial damage.

Unfortunately, for elderly citizens over 75 years of age, an inflation rate of 2.2% is reflected - more than a fifth higher than the general rate of 1.8%.

Housing costs have been identified by Alliance Trust as one of the two main areas of expenses for the elderly – putting an additional strain on those still renting as opposed to those who have purchased their home.

Shona Dobbie, Head of the Alliance Trust Research Centre, warned ‘the flooding in England and the heat wave experienced in Europe had an impact on some food crops and prices may rise further in the coming months.’

But for homeowners who face lower inflation, and with utility costs stabilizing, individuals may have additional equity due to rising house prices. These funds could be released through a secured home loan to meet financial pressures until markets re-stabilize completely.

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