Shelter: Private renters spending £11bn more than they can afford on rent

England’s private renters are paying out £11 billion more a year on rent than they can afford – or an average of £425 a month per household among those who are overspending – new research by Shelter shows.

 

Using the widely accepted measure of affordability which says rent should take up no more than 30% of household income, the charity calculated the overspend by comparing government data on private rents and incomes.

Hugely unaffordable rents are dominating daily life for millions of people, forcing them to rely on costly credit cards or borrow what they can from family and friends.

“Our services see the real cost of private renting, which is leaving parents struggling to put food on the table or turn the heating on, while also keeping a roof over their children’s heads,” said Shelter Chief Executive Polly Neate. “When someone is forced to spend hundreds more than they can afford on rent each month, it’s clear that private renting isn’t working for everyone.”

Boosting social housebuilding is the only way to end the housing emergency, which is why the new government must deliver at least 90,000 social rent homes a year over the next parliament.

“Housing is an important issue for renters and all politicians must take note,” Neate said.

The analysis exposes private rents as eating up 41% of incomes on average, forcing 2.2m households across the country to spend beyond their means just to pay rent.

Those on lower incomes are hit the hardest – over a third (37%) of the £11bn overspend is being shouldered by the poorest fifth of households, resulting in an even bigger squeeze on their finances.

 

Those on lower incomes are hit the hardest – over a third (37%) of the £11bn overspend is being shouldered by the poorest fifth of households, resulting in an even bigger squeeze on their finances.

 

Shelter’s own figures, confirmed by a YouGov study, reveal some of the measures parents are taking in order to keep up with private rents:

• 24% have borrowed from friends or family over the last year.
• 23% have used a credit card over the last year.

 

Shelter has joined forces with a coalition of housing and homelessness charities to demand the next government invests in a new generation of social rent housing, to offer struggling private renters a genuine alternative.

Providing at least 90,000 homes a year over the course of the parliament is seen as kickstarting efforts to reach the three million social homes needed over 20 years.

As reported by 24housing, survey stats released by property specialist the Engen Group show over a third of respondents paying too much in housing costs with younger people and women are the most likely to suffer.

 

 

 

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