UK rents soaring while struggling tenants' see incomes freeze
Published by Max Salsbury for 24dash.com in Housing and also in Communities, Finance
UK rents soaring while struggling tenants' see incomes freezeImage: Money via Shutterstock
The UK's private rented sector (PRS) tenants are being increasingly squeezed as rental costs soar in the face of static incomes.
According to SpareRoom.co.uk's research, PRS rents have risen by 10% while tenants’ accommodation budgets have actually fallen by 0.5% since 2009.
And London room rents have soared by more than a quarter (26%) in the past five years - more than twice as fast as budgets, which have increased by just 10%.
Most shockingly, SpareRoom.co.uk found that in Scotland flatsharers’ budgets have plummeted by more than a fifth (22%) since 2009, while rents have increased by almost a quarter (24%).
According to the research, Northern Ireland has seen the UK's slowest rental increases over the past five years (10%), yet tenants’ budgets for accommodation have dropped 5%.
Over the past year, Scotland and London have become the UK's least affordable areas.
The average monthly UK room rent is currently £550 – almost a third (31%) of the average take home pay of a full-time employee.
Reacting to the news, Alex Hilton, director of tenants campaign group Generation Rent, said: “With rents rising faster than incomes, millions of private renters are struggling to put food on the table, let alone build the independent life that homeowners take for granted.
“Not only do we need more house building to bring supply back in line with demand, but stronger rights for renters through secure tenancies and lower letting fees would help keep a lid on exploitative rents.”
SpareRoom.co.uk's director, Matt Hutchinson, said: “What’s clear is that affordable rents are becoming ever more scarce. Many people are still struggling with the cost of living and this isn't being helped by the fact that wage growth is the lowest since records began.
“The problem is we have a chronic shortage of housing in the areas where jobs are being created, so rents continue to rise as supply fails to meet demand. In some areas of the capital we’re seeing up to 13 people compete for every room advertised.
“The only obvious short-term solution is to encourage more homeowners to let their spare bedrooms and create supply. To do that, the Rent A Room Scheme tax-free threshold needs to be raised to act as a proper incentive. It hasn’t been increased since 1997 and rents have risen by 103% in that time. Not only will this benefit renters, it could stop thousands of homeowners slipping into arrears when interest rates finally rise.”