An alarmingly new study has found that almost nine out of ten renters in Britain cannot save enough to cover even a quarter of the deposit required to buy an average-priced first home.
The investigation by the Equality Trust discovered that 86% of tenants have less than the £8,838 required for just a 5% deposit on a typical home.
This news comes on the heels of reports that the so-called housing crisis has spread north from the capital, taking hold of cities from the Midlands upwards.
Spiralling rents are pricing many families out of getting onto the property ladder, despite mortgage interest rates plummeting to historically low levels.
Those renting in the capital already spend in excess of 60% of their income on rent. Average rents in Britain currently stand at £764 per month, while in London they are £1,543.
A spokesperson for The Equality Trust said, ‘the vast majority of renters are locked out of home ownership through a lack of income and savings, with many unable to afford even the cheapest housing.’
The study found that even in Burnley, the local authority with the cheapest houses in Britain, eight in ten people don’t have enough savings to raise a quarter of the deposit for a home.
John Hood, acting director of the Equality Trust, said, ‘it’s startling to see just how many people are priced out of owning their own home. At the same time, a small number of people at the top are making huge wealth from our dysfunctional housing market.’
‘This isn’t sustainable and we need action from our politicians. That means reforming council tax, which hits the poorest hardest and a substantial house building programme. Anything less threatens to lock a generation out of home ownership and into insecurity and punishingly high rents,’ he added.
Nearly 9 in 10 renters can’t raise 5% deposit
New Prime Minister Theresa May has promised to tackle the housing deficit. Just last month, she noted that unless this issue was dealt with swiftly, young people in the UK will, ‘find it even harder to afford their own home.’
‘The divide between those who inherit wealth and those who don’t will become more pronounced. More and more of the country’s money will go into expensive housing,’ she added.