Almost one in seven private renters are spending more than half of their total income on rent, new analysis reveals.
New research published today by the Local Government Association (LGA) reveals a shortage of affordable housing is leaving a generation stuck in what the association described as a ‘rental logjam’.
While 14% of renters are spending over half their income on rent, just 2% of homeowners who are spending the equivalent on their mortgage, the analysis found.
The LGA also discovered 43% of private renters spend more than 30% of their income on rent, the same percentage as those renting from a Housing Association.
And 37% of those renting from a local authority are also spending the same proportion on rent.
Private rents currently average at £852 across the country, the LGA said, with rents defined as affordable set up to 80% of market rates, at an average of £545 per household.
Local government leaders also warned high house prices and rent made it very difficult for young people to save a deposit to buy their first home. The average deposit costs 71% of a first time buyer’s annual income, the LGA’s research found.
Deposits in the South East are 85% of the average household income, while in the North West they are an average of 55%. In London, deposits fetch the highest price, at 133% of a household’s average yearly income.
The LGA urged the Government to build more affordable homes in order to clear the ‘rental logjam’.
‘Only an increase of all types of housing – including those for affordable or social rent – will solve our housing shortage and a renaissance in house building by councils is ultimately needed if we are to boost affordability,’ said Cllr Judith Blake, LGA housing spokesman.
‘For that to happen, councils must be able to borrow to invest in housing and replace sold homes and reinvest in building more of the genuine affordable homes our communities desperately need.’
