According to new data from the estate agents Hamptons, the cost of renting a home rose by 12% in the year to August, which is the highest increase in nine years, making it increasingly difficult to save while renting increasingly difficult.

A typical monthly rent for a newly let property in the UK is now £1,304, with pressure on landlords from high mortgage rates and rising demand from tenants the main cause for the increase in rental costs. The continued uptick in prices means renters are struggling to save during the cost of living crisis.

Lucinda O’Brien, expert at money.co.uk savings accounts, said, “The increase in rental prices amidst a cost of living crisis makes it near impossible for the general public to build their savings.

“As such, it’s important we’re looking at all options to try and make the most of our money where possible. One way renters can look to build their savings is to cut back on their outgoings.

“For example, if you drive, see if you can make your car insurance cheaper or take public transport where possible. Cutting back on your mobile contract can also help; check if you can switch to a SIM-only deal or haggle for a lower price on your existing contract.

“It’s also important to find the best account for your savings. Getting a good return on your savings can help deal with the rising rental prices, so it’s worth looking into the best savings account that works for you.

“Currently, Paragon’s Double Access Account Issue 2 (5.05%) and Kent Reliance Easy Access Savings Account Issue 65 (5.01%) offer the best interest rates.

“However, for those who may have a little bit more spare cash, a fixed-rate bond may be the best option. Fixed-rate bonds offer a guaranteed amount of interest on terms from nine months to five years. Currently, NS&I 1 Year Guaranteed Growth Bond Issue 72 and the My Community Bank 3-year fixed term offer some of the best interest rates at 6.20% and 6.08%, respectively.

“Another option is a cash ISA, which allows savers to get tax-free interest on their savings. Cynergy Bank Online ISA (Issue 42) offers one of the best interest rates currently at 4.70%, and it can be opened with just £1 and easy access to withdrawals 24/7.

“To make sure you’re best prepared for the necessary outgoings and therefore can prioritise your savings, it’s a good idea to work out how much cash you need. Making an outgoings plan, taking into account rent, bills, food and drink, phone etc., will help you set targets to meet throughout the month.”

For more information and guidance on saving, including the best savings rates available today, visit https://www.money.co.uk/savings-accounts.

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