14:47 PM, 14th November 2022, About 7 months ago 5
With rumours that the Government might be about to increase council tax bills in its Autumn Statement comes news that hard-up tenants are already paying council tax equivalent to 37.5% of their rent.
Ocasa, the specialist rental platform, says that the cost of the average council tax bill in England is equivalent to 17.7% of a tenant’s rent bill.
But for the hardest-hit renters, this rises to 37.5%.
The firm also highlights that rising inflation and interest rates, along with living costs mean that tenants are bracing themselves for hard times ahead – just as many landlords look to increase rents to cover rising mortgage rates.
Most renters are also responsible for paying the council tax bill on their rented property and in England, the average council tax bill is £164 per month.
With average rent at £926 per month, this means council tax costs the equivalent of 17.7% of the rent.
Looking at the regions, Ocasa says that council tax is hitting tenants in the North East the hardest.
The average council tax bill in that region is £175 per month, equivalent to 30.3% of the average regional rent bill which currently stands at £577.
For renters in the North West, average council tax bills of £171 per month equate to 25.3% of rent, and the same is true in the East Midlands where council tax costs £172 per month.
Council tax as a percentage of rent is also higher than the national average in Yorkshire and Humber (25.1%), the West Midlands (22.6%), and South West (19%), while renters in the East of England (17.5%), South East (16.3%), and London (8.7%) are paying less than the national average.
When analysing the nation at local authority level, it is revealed that the tenants whose council tax bills equate to the largest percentage of rent are those in Hartlepool, County Durham.
Here, the average monthly council tax bill is £183 which is equivalent to 37.5% of the local average rent bill of £488.
It’s the same situation for tenants in Burnley, Lancashire, where an average council tax bill of £179 is also equivalent to 37.5% of rent (£479).
Tenants in Middlesbrough are handing over the equivalent of 37.3% of rent, while renters in Pendle (36%), Hyndburn (35.5%), County Durham (35.1%), North East Lincolnshire (34.9%), and Redcar & Cleveland (34.7%) are also dealing with expensive council tax.
At the other end of the scale, London tenants are enjoying the lowest proportion of council tax versus rent.
Renters in the City of Westminster are paying an average monthly council tax bill of just £72 which is equivalent to 3.1% of the average monthly rent price of £2,359.
In Wandsworth, council tax of £73 per month equates to just 3.7% of rent, while tenants in Kensington and Chelsea (4.2%), the City of London (4.8%), Hammersmith and Fulham (5%), Camden (7.5%), Southwark (7.5%), and Tower Hamlets (7.6%) are paying well below the average for council tax as a proportion of rent.
Jack Godby, the sales and marketing director at Ocasa, said: “This research makes it glaringly obvious that those tenants who can afford to pay the highest rent are being gifted with below average council tax bills, while those who live in the most affordable locations are being saddled with the most expensive tax.
“Is it fair that the wealthiest people are paying the least council tax, while the hardest-up are paying the most?
“It certainly doesn’t seem so, but the government will argue that public services in the wealthiest areas are under much less strain – and therefore require less money to operate – than in those places where the population relies more heavily on government-funded assistance.”
He added: “The result is a vicious cycle in which those with the least advantage become even more disadvantaged.
“As the current cost of living crisis becomes more entrenched, more people are going to have to turn to public services for help.
“And this comes at a time when the government is already expected to increase council tax rates.”
Previous Article£3,600 unpaid tenant's bill in landlord's name?
18:01 PM, 14th November 2022, About 7 months ago
So where rents are low, council tax is a higher percentage of those rents. What a surprise, who'd have thought it?
18:57 PM, 14th November 2022, About 7 months ago
Simple solution. Just increase the rents and the council tax percentage then reduces accordingly. There. All sorted.
Question: Why are the quoted London council tax rates so low when compared to the rest of the country?
19:21 PM, 14th November 2022, About 7 months ago
Reply to the comment left by Seething Landlord at 14/11/2022 - 18:01
I think the point the writer was making was that the council tax itself is far higher in those poorer areas.
Monthly council tax bills of £72 in the City of Westminster compared with £183 in Hartlepool?
That seems a huge differential I think when taking the figures as a comparison against rent.
C Tax 3.8% of rent in central London compared with 37.5% in the North East.
20:36 PM, 14th November 2022, About 7 months ago
Reply to the comment left by Anne Nixon at 14/11/2022 - 19:21
Some of the reasons given for the low council tax rates in Westminster are:
High revenue from tourism and business rates (20% of the London total)
High income from on street parking charges
Low expenditure on social care.
9:25 AM, 15th November 2022, About 7 months ago
don't forget these figures don't include any discounts eg
If any of these are applicable you can get up to 50% reduction.
If for instance you take Hartlepool and Westminster as examples...More on low income/benefits/disabled here than in London ? so a 50% reduction in £182 would make a huge difference to the overall headline stats.