Families now spend HALF their monthly income on rent, figures show
Young Brits in some parts of the UK are having to spend almost 60 per cent of their take-home salary on RENT, shocking figures reveal today.
The average rent in the UK is now £945 per month, with a one-bed flat typically now costing £745 per month.
This means the average ‘rentysomething’ has to give 48 per cent of their income to a landlord, up from 45 per cent in 2007.
And it is Londoners who are hit the hardest, with rent on a one-bedroom home (£1,133) in the capital accounting for a staggering 57 per cent of post-tax income of under-30s.
This is on the back of rents increasing by 27 per cent since 2007 while income has only risen by 17 per cent.
The average rent in the UK rose to £945 in May, two per cent higher than it was last year, according to the Countrywide Lettings Index.
London is forcing the overall percentage up, with many regions becoming more affordable thanks to an increase in wages.
With house prices up almost 14 per cent over the past year in the capital, and rent accounting for so much of a Londoner’s income, the prospect of owning a home inside the M25 is becoming more and more of a dream for most.
But the situation isn’t as bad in other parts of the country.
In the North East, the cost of a one-bedroom home accounts for 35 per cent of the post-tax income of an average full-time worker under 30, a steep drop on the 42 per cent in 2007.
Tenants in the North East have benefitted from the highest regional income growth since 2007 (32 per cent), in addition to rents being only 11 per cent higher than they were in 2007.
Johnny Morris, research director at Countrywide, said: “In most parts of Great Britain, rising incomes have softened the impact of increasing rents. “For more than half of the country, rents now take up less of the average person’s take-home pay than before the downturn in 2007.
“But in London rents have risen much faster than wages, stretching affordability. Many tenants have adapted to rising prices by either moving to cheaper areas, further from the centre, or sharing.
“Stalling rental growth in the capital begs the question whether London’s rents have reached their affordability limits for now.”
One campaign group today (Mon) called on the government to improve the situation which has left young people “exploited”.
Dan Wilson Craw, policy manager at Generation Rent, said: “With long waiting lists for social housing and high prices shutting off home ownership, young people have no choice but to rent privately - and they’re being exploited as a result.
“Half of their income going to landlords leaves them with little disposable income.
“This makes it impossible to save for a home and a pension, and also acts as a drain on the wider economy.
“The government needs to step up its housebuilding programme, and start controlling rents until they can solve the housing shortage.”