'Rent trap' leaving a generation without means to buy a home, warns Shelter
Published by Max Salsbury for 24dash.com in Housing and also in Communities, Finance
House prices in some UK regions 'will take eight years to recover'
Rents in England are rising by an average of £300 a year, forcing many people into a 'rent trap' with little means to save for a home of their own, Shelter has warned.
The housing charity's new report's analysis of government figures reveals that average private rents rose by 2.8% from 2011 to 2012 - equivalent to an increase of £297 in a year on a typical rented home.
According to the report - 'The Rent Trap' - rents rose by the equivalent of more than £500 in a year in one in seven locations in England. Six areas saw equivalent rent rises of more than £1,500 in a year, with rents in Surrey Heath rising at the fastest rate in England.
The report concludes that high rents leave many renters with so little left over that they struggle to save for a deposit on a home of their own.
A survey of 4,300 renters commissioned by Shelter found that 55 percent say that after paying for rent and essential bills, they have just £100 or less left over each month for everything else.
As a result, 72 percent say that they are only able to put aside £50 or less each month in savings, leaving them with little hope of saving for a deposit.
Meanwhile, 58 percent say that they are not able to save any money at all.
Census data released last month revealed a large shift towards renting over the last ten years, with the proportion of homes rented privately climbing by 69 percent since 2001.
In the same period, the proportion of homes owned with a mortgage dropped by 15 percent.
Renter Abi Reilly lives with her husband and four-year-old son in Reading. Abi, a teacher, said: "Owning our own home feels like an impossibility. The rent we pay out each month means we don’t have the disposable income to save enough for a deposit of any kind.
"With rent so high, it seems impossible for people like us to save enough to get anywhere near what we need for a deposit. My husband and I work incredibly hard but it feels like we will never have the stable family home we want so much."
Campbell Robb, chief executive of Shelter, said: "This report reveals the huge scale of the rent trap holding back young people and families up and down the country. Rising rents are leaving people with little or nothing to save at the end of each month, giving them little chance of ever saving enough to climb on to the property ladder.
"The renters we speak to have never been less hopeful. A relentless stream of rent rises means that most feel they will never move on from a life paying ‘dead money’ to landlords, in a home that they can’t make their own. And for some, rising rents have more immediate consequences – not enough money to spend on food, fuel or other essentials.
"Unless something changes, the chances of the next generation getting a home to call their own look increasingly bleak. The government needs to show young people and families exactly how it plans to dismantle the rent trap for good.”
Responding to today's report, Labour London Assembly Member Tom Copley said: "Today's report from Shelter is further proof that the private rented sector in London needs regulating. Londoners are facing a cost of living crisis with rising rent, food and heating bills. At the same time Boris has increased transport fares above inflation for the fifth year running. In Germany and Switzerland there are rules in place to protect tenants from excessive rent increases. If these rules work there, why can't they work here as well? It's time our out of touch Mayor got his head out of the sand and did something that actually helps struggling Londoners.
"We are also seeing increasing numbers of families with children in the private rented sector. A recent report by the IPPR shows that there are twice as many households with children privately renting than there were ten years ago. Being forced to constantly move by unscrupulous landlords and rising rents harms their education and development. We need action now."