Nearly a quarter of private tenants in the UK are spending more than half their take-home pay on rent, new figures show.
It is generally accepted that for housing to be genuinely affordable, people should spend no more than 30-40% of their monthly income on rents, mortgage payments, or other housing related costs. But a new YouGov survey, commissioned by TheHouseShop.com, has found that 24% of private tenants currently spend over half their income on housing, while one in six are currently spending more than 60% of their monthly income on housing.
The research suggests that mortgaged homeowners are generally in a stronger position than tenants when it comes to affordability, with just 15% of mortgaged homeowners spending more than half their incomes on housing.
Some 44% of mortgaged homeowners are spending up to 30% of their monthly income on housing, which is perfectly within the affordable range. However, only 20% of private renters can say the same – or less than half the proportion of mortgaged homeowners, with housing affordability generally most stretched among young renters.
When looking at the mean percentage of income spent on housing, private renters are paying almost 30% more than mortgaged homeowners – with 42.5% for private renters and 32.9% for mortgaged homeowners, owed in part to the fact that they have able to take advantage of a prolonged period of low interest rates and cheap mortgages.
Nick Marr, co-founder of TheHouseShop.com, said: “Renting in the UK at the moment is a bit of a Catch 22. As tenants spend more and more of their income on rent and other bills, their ability to save for a deposit and benefit from the lower monthly payments offered by many mortgage deals diminishes significantly.
“For anyone spending more than half their monthly income on housing, even a relatively minor unexpected expense can pose a serious problem. Our YouGov research shows that almost a quarter of tenants renting from a private landlord are currently facing this situation.
“If your car breaks down or you accidentally damage your phone or laptop, you may find that you have to choose between paying your rent in full or getting them fixed – and that is an unpleasant scenario for anyone to find themselves in. With this in mind, it is easy to see how tenants can quickly become stuck in the renting cycle and never achieve the level of stability and comfort they crave.”