This Is How Much Of Their Income People Are Now Spending On Rent According To New Research
The Debrief: New research from the Local Government Association reveals the true extent of the renting crisis. But what is the Government doing about it?
Oh, Housing Crisis, how do we love thee? Let us count the ways…tumbleweed.
If you currently rent in Britain, particularly if you reside in London or the South East you’ll know all too well that there is not only a crisis when it comes to house prices in this country, but renting costs. Arguably, the renting crisis is far more serious because it affects millions of people who are trapped in an unstable corner of the housing market for no other reason than the fact that they can’t afford to buy their own home.
Today, the Local Government Association (LGA) has released new research which finds that one in seven private renters are spending half of their income on their rent. In terms of how this compares with people who own their own homes, only 2% of homeowners spend an equivalent amount on their mortgage. This means that renters are, unequivocally, worse off than homeowners (but you didn’t need us to tell you that).
The LGA has said that this ‘shortage of affordable housing is leaving a generation stuck’ in what they call a ‘rental logjam’. Local government leaders also said that ‘the figures highlight the difficulties renters face not just in finding an affordable home to live in, but saving up a deposit for a home of their own’. It’s no surprise, the average deposit now costs 71 per cent of a first-time buyer’s annual income and, when you’re spending so much of that income on rent, how are you supposed to save?
All of this is making it more and more difficult for young people to save and buy their first home. The LGA has previously predicted that under 25s are now half as likely to be homeowners than they were 20 years ago. Of course, all of this hurts those on middle and low incomes the hardest. As ever.
Cllr Judith Blake, who is the LGA’s Housing Spokesperson, told The Debrief ‘when one in seven private renters are spending half their income on rent, it’s no wonder we have a rental logjam – with a shortage of homes with genuinely affordable rent, and young people struggling to have enough income left over to save for a deposit.'
In terms of how we’re ever going to solve this very serious problem, she said ‘a thriving private rented sector helps create a balanced mix of available housing. A new wave of genuinely affordable homes for rental, that costs 30 per cent of household income or less, would provide tenants with stability, reduce the squeeze on household incomes and help more people get on the housing ladder.'
The Debrief asked the Department for Communities and Local Government (DCLG) to comment on this, specifically telling us what they plan to do about it. A spokesperson for DCLG said ‘this Government is determined to make housing more affordable and we’re investing £7.1bn to build more affordable homes.’
‘We’ve already helped more than 400,000 households into homeownership through government-backed schemes since 2010, and the number of first-time buyers is at a nine-year annual high.’
‘Our Housing White Paper sets out further measures to build more homes, including our £3bn Home Building Fund which will provide development finance for homes to rent and buy.’
It all sounds good but when it comes to the housing crisis, talk is cheap and rents are expensive. Something is very rotten at the heart of this country’s private rental sector. The fundamental problem is this: house prices fluctuate, going up and down, depending on what people can afford to borrow against their salaries. Because of this, you’ll notice that house prices which have been consistently rising astronomically year on year throughout the last decade have actually started to slow down because people’s salaries are stagnating in comparison. Rents, however, are inflated by letting agents and landlords who want to get the absolute maximum possible for their property. There is no regulation in place to stop them doing this.
In recent years report after report has warned that the situation for renters is worsening, and yet, here we are. We urgently need more house building and some very creative thinking from our Government.
You might also be interested in:
Follow Vicky on Twitter @Victoria_Spratt
At work? With your gran?
You might want to think about the fact you're about to read something that wouldn't exactly get a PG rating