0:06 AM, 31st January 2024, About 11 months ago 4
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The harsh reality of renting in the UK for young people has been revealed by a report which highlights that just 7% of the rental market is affordable for under-30s.
The research from Zero Deposit is based on the combined cost of a five-week deposit and the first month’s rent.
The firm also looked at average monthly rents and incomes of different age groups of renters in each of the UK’s 361 local authorities.
It then calculated the percentage of local authorities where the initial cost of renting was realistic, based on 50% of the average renter’s monthly income – a recommended ratio for rent spending.
Zero Deposit’s chief executive, Sam Reynolds, said: “The high cost of renting is well documented but as our research shows, tenant affordability is dramatically reduced when taking the cost of an upfront deposit into account.
“So much so, that just a tiny proportion of the rental market is realistically affordable for those under the age of 30.
“Removing this high, upfront cost would, at least, give them a fighting chance at finding an affordable rental property, but as it stands, the financial obstacle they face is simply too large to overcome for many renters.”
He added: “The result? Many are forced to look further afield for affordable rents or give in to the inevitability that they have to allocate a far larger proportion of their income to covering the cost of rent, leaving them with very little to get by on for the rest of the month.”
The report shows that young renters face the biggest challenge when it comes to the initial cost of renting with an average monthly income for 18–21 year-olds of £1,232.
That means that half of their wages (£616) is enough to cover the monthly rent in only 11% of local authorities.
However, when the deposit is added, there is no local authority where 18-21 year-olds can afford the initial cost of renting.
For 22-29 year-olds, the situation is slightly better but still bleak.
Their average monthly income is £1,202, which allows them to pay the monthly rent in 78% of local authorities, but only 7% when the deposit is included.
The findings reveal that the average UK rent is £921 per month, with London and the South East being the most expensive regions, at £1,873 and £1,148 per month respectively.
The City of Westminster has the highest monthly rent at £3,154.
On top of that, renters also must pay an upfront deposit, which averages £1,063 for a five-week period.
This means that the average UK renter needs £1,913 to secure a rental property, which is more than their entire monthly income of £2,950, let alone half of it (£1,475).
The report suggests that older renters have more options in the rental market, as their incomes are higher, and tenants aged 30-39 can afford the initial cost of renting in 32% of local authorities.
Those aged 40-49 and 50-59 can do so in 46% and 39% respectively.
Mr Reynolds says that with strong competition, younger tenants may not realistically be able to afford to rent a home.
He adds that the Government needs to address the UK’s undersupply of property and encourage landlords to invest in homes to rent.
Cider Drinker
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Sign Up10:27 AM, 31st January 2024, About 11 months ago
The problem is that young renters either don’t earn enough or they don’t prioritise a home of their own over having the latest mobile phone, TV subscriptions etc..
Second hand cars are more expensive than back in the day. Gas, electric, council tax are all more expensive too. Of course houses are more expensive either to buy or to rent. However, LHA in my area has risen by just 11% in 4 years. Much lower than inflation and suggesting to me that rents have only risen by half of the inflation figure.
moneymanager
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Sign Up12:35 PM, 31st January 2024, About 11 months ago
All of the apparent societal problems are a distraction, our wealth, private and embedded in the nation, is being sucked dry by central banking and their industrial capitalistic confederates.
The First thing we need is a central bank that works for THIS country, the BoE is just the local face of the BIS and then we need jobs, proper jobs, because the reason that things are 'expensive' is because we aren't producing enough or at least, it's not being kept here.
Jim K
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Sign Up13:23 PM, 31st January 2024, About 11 months ago
Reply to the comment left by Cider Drinker at 31/01/2024 - 10:27
I believe the govt put a stop to LHA rises about 4 yrs ago. There is some catch up due in April
John Bentley
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Sign Up15:54 PM, 31st January 2024, About 11 months ago
If people can't make the sacrifice to save a couple of grand for something as important as a place to live then they're probably not going to be responsible,respectful tennants.