Almost half of UK renters believe that they will never be in a position to buy their own home and that may be because so much of their income is now going towards paying rent, research shows.
According to an independent survey for construction and regeneration company Keepmoat, 44 per cent of renters in the UK believe they will never own their own property with not being able to afford a deposit the most common reason for not getting on the property ladder.
Dave Sheridan, Chief Executive of Keepmoat, said, “It’s clear that the amount of money first-time buyers need to raise for a deposit continues to stop many from getting on the property ladder.”
High rents in relation to earnings may have a lot to do with the fact that many people now feel unable to save enough money for a deposit to buy a property.
Rents in England, for instance, now stand at 47 per cent tenants’ average take-home pay, data from the latest English Housing Survey shows. In contrast, those who have secured a mortgage face repayments equal to 23 per cent, on average, of their earnings after tax.
The comprehensive report also revealed that once housing benefit is stripped out of income, average rents are now more than half – typically 52 per cent – of average gross pay, up from 48 per cent in 2003.
The report said, ‘The increase between these years in the proportion of income (excluding housing benefit) spent on rent is consistent with the recent increase in housing benefit receipt among private renters in work.’
Somewhat unsurprisingly, tenants in London face the highest rents, with costs equal to 60 per cent of their gross earnings with housing benefit, or 72 per cent without it.
Matt Hutchinson, Director of the flat share website SpareRoom.co.uk, said the report painted a “bleak picture” for renters who want to acquire property, as we move “towards becoming a nation of renters”.
“Rents are now so high that many will find saving is close to impossible, putting homeownership still further out of reach,” he said. “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.”
David Orr, Chief Executive of the National Housing Federation, also believes that the figures provide a further sign that significantly more needs to be done to cure what is a “very sick housing market”.
He commented, “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.”