Member Article

Rents double mortgage payments

Renters spend twice as much of their income on their accommodation as homeowners spend on their mortgage, according to the Department for Communities for Local Government.

The latest English Housing Survey indicates that renting is increasingly prevalent throughout the UK, as many struggle to enter the property market. The survey indicated that a third of all first time buyers are over 35, and many renters are older and more affluent, with average incomes rising faster than homeowners.

Between 2008 and 2011 the median income of private renters grew by 11.2% from 2008 to 2011, while homeowners’ median incomes grew by only 2.5%.

Renting levels in London are particularly high, and 1 in 4 in the Capital were found to be tenants. However, this is an increasing trend throughout the whole of the UK, especially in the East Midlands which has seen the fastest growth in private renting between 2008 and 2011 with a 44% increase.

Despite this trend however, there is also a widening gap in costs, as owner-occupiers weekly mortgage costs were an average of 19% of their gross weekly income, while weekly rent payments represented 43% of private renters’ weekly incomes.

Campbell Robb, chief executive of Shelter, told the Guardian: “It’s common knowledge that renting is fast becoming a way of life for a whole generation of Britons locked out of the housing market, and today’s figures show that renters are growing in number in almost every part of England.

“Britain may call itself a ‘property-owning democracy’ but we can’t ignore the new reality of renting. It’s time that government realised that renting is the only option for more and more families every year.”

The Housing Minister Grant Shapps said: “Private renting provides a flexible option for those who choose to rent, as well as those saving up for a deposit on their first home.

“And while last year mortgages for first-time buyers accounted for a third of the total market, only 12% went to buy-to-let landlords.

This was posted in Bdaily's Members' News section by Ruth Mitchell .