Nearly one in seven private renters are spending more than half of their total income on rents, according to new research. This comes in contrast to just 2% of homeowners spending the same on their mortgage.
These figures have been released by the Local Government Association (LGA) and suggest that renters are facing difficulty in not just finding an affordable home to live in, but to save up for a deposit.
Indeed, the average deposit is now 71% of a first-time buyer’s annual income.
The LGA believe that the Government should start a new wave of rental properties that reflect what families can afford, which seemingly is no more than one-third of total income.
In addition, the research suggests:
- 43% of private sector tenants spend more than 30% of their income on rent
- 37% renting from a local authority also spend over this amount on rents
- Rents currently average at £852 across the country
While affordable and social rents are lower typically than private rents, the high number of social tenants spending in excess of 30% of their income on rent shows low total household incomes.
One in seven tenants spend half of their income on rent
Greater house prices and rents are making it more difficult for UK youngsters to save up for a deposit for their own property.
In the South East, deposits are 85% of the average household income, but in the North West, this figure relaxes to 55%. London however is seeing the highest price, with 133% of a household’s average yearly income.
The LGA has called for councils to be given powers and access to funding to resume their historic role as a key builder of affordable homes- including those for social and affordable rents.