Tenants spending half of income on rent
By |Published On: 17th July 2015|

Home » Uncategorised » Tenants spending half of income on rent

Tenants spending half of income on rent

By |Published On: 17th July 2015|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

A new report on the make-up of the country’s housing market has revealed that renters in England spend half of their take-home pay on rental costs.

The latest English Housing Survey shows tenants spent an average of 47% of their total net income in rent. Those who had taken out a mortgage face repayments of around 23% of their earnings after tax.[1]

Living trends

Providing a comprehensive overview of English housing stock and trends, the survey indicated that once housing benefit is removed from income, average rental costs are more than half of the typical gross pay.

Across the country, private renters paid 43% of the average total gross income of the main householder and partner, including housing benefit, in rent. Without including the state payments, tenants faced rental costs that were on average 52% of their earnings. This total has risen from the 48% recorded in 2003, with the proportion of pay plus housing benefit dropping marginally from 44%.[1]

‘The increase between these years in the proportion of income (excluding housing benefit) spent on rent is consistent with the rent increase in housing benefit receipt among private renters in work,’ the report said.[1]

Concern for the young

Concerning data from the reports highlights the difficulty of 16-24 year-olds. For this particular age bracket, rents accounted for a huge 88% of incomes and 81% for when state payments were included.

David Orr, chief executive of the National Housing Federation said that the results of the survey were, ‘yet another symptom of a very sick housing market that is carving ever-greater chasms between those who own a home and those who don’t.’[1]

‘Private renters are having the hardest time of it, paying the most as a proportion of the pay cheques and in real terms. We need to bring an end to these extortionate prices and give people real choices, by building the homes this nation needs,’ he added.[1]

Roger Harding, of housing charity shelter, said that private renters, ‘are bearing the brunt of our dramatic housing shortage.’ He went on to say that, ‘the result is an entire generation forced to give up hope of a stable future and resign themselves to a lifetime of expensive rents.’[1]

Tenants spending half of income on rent

Tenants spending half of income on rent

Rising renters

Figures from the survey also show how tenant numbers have increased over the last decade. In 2003-04, 2.1m households were privately rented. By 2013-14, this figure had grown to 4.4m.[1]

There was also a sharp rise in renters of every age group, but in particular for those aged between 45-54. In this age bracket, the number of tenants rose from 217,000 to 662,000 over the ten-year period.[1]

With people staying in the private sector for longer, the total number of families with children who are tenants has risen. In 2003-04, 23% of tenant households contained dependent children but by 2013-14, this figure had increased to 35%.[1]

First-time buyers are being forced to turn to their family for help, as they struggle to get on the housing ladder. The report revealed that of first-time buyers who have been in their property for under five years, 27% received help in financing their move through a loan or payment from their parents or friends. This was in comparison to 20% a decade previously. [1]

‘Rents are now so high that many will find saving is close to impossible, putting homeownership still further out of reach,’ said Matt Hutchinson, director of the flat share website SpareRoom.co.uk. ‘The situation for renters is becoming more and more indiscriminate. We’re not just talking about young professionals who can’t buy-families who crave stability for their kids are impacted too,’ he added.[1]

[1] http://www.theguardian.com/money/2015/jul/16/tenants-in-england-spend-half-their-pay-on-rent?utm_source=dlvr.it&utm_medium=twitter



About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

Share this article:

Related Posts


Looking for suitable
insurance for your
Check out our four
covers for landlords