Renters spending 4x more of their income on rent than homeowners on mortgages
Renters are spending almost four times more of their income on housing than homeowners, in signs that the wealth gap is worsening in the UK, Resolution Foundation research shows.
The average renter spends more than a third (34%) of their wages on rent, compared to 9% for mortgage holders.
Cara Pacitti, senior economist at the think tank, said: “Private renting remains the most expensive of all tenure types, despite continuing issues of quality and security.
“Average floor space per renter has fallen by a fifth over the past 20 years, while almost a quarter of private rental homes failed to meet the Decent Homes Standard in 2021-22, posing significant challenges to renters’ living standards.”
Homelessness charity Shelter is dealing with renters facing huge rent hikes as high as 50%, according to The Independent.
Nadeem Khan, an adviser at Shelter’s helpline, said: “We’ve been inundated with distressing calls from families that have been grappling with steep rent rises.”
A lack of housebuilding is generally blamed on the steep increases, while landlords also point to higher taxes caused by policies like the elimination of mortgage tax relief, forcing them to raise rents to make a profit or even break even.
Rising mortgage and energy costs are also likely to filter down to tenants in the form of higher rents.