One in seven private renters spend half income on rent

The Local Government Association (LGA) has warned that 14 per cent of private renters are spending more than half of their total income on rent.

Comparing this to the two per cent of homeowners on their mortgage, the LGA has warned that a shortage of affordable housing is leaving a generation stuck in a ‘rental logjam’.

Furthermore, with the average deposit now costing 71 per cent of a first time buyer’s annual income, the LGA analysis highlights the difficulties facing renters and those searching for their first home to buy. Previous LGA research revealed under 25s today are now half as likely to be homeowners than 20 years ago.

The research also revealed that: 43 per cent of private renters spend more than 30 per cent of their income on rent; 37 per cent of those renting from a local authority are also spending the same proportion on rent; and private rents currently average at £852 across the country, with rents defined as affordable set up to 80 per cent of market rates, at an average of £545 per household.

Last year, the UK built around 30,000 new affordable homes, the lowest number in 24 years, with many being priced at levels not affordable for many families. This leaves the LGA urging for housing powers and access to funding to be given to councils, so that they can ‘resume their historic role as a major builder of affordable homes’.

Judith Blake, LGA Housing spokesman, 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.

“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. 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.