Rent rises outpace earnings to hit tenant affordability

Rent rises outpace earnings to hit tenant affordability

0:02 AM, 18th April 2024, About 2 months ago 2

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Over the past 10 years, the cost of rent has significantly outpaced wage growth, leaving many tenants struggling to afford their homes, research reveals.

Zero Deposit has analysed rent prices and average salaries in England between 2014 and 2023.

It found that rents have rocketed by 34%, while salaries have only increased by 28.8%.

This, the firm says, translates to a real terms fall in purchasing power for renters of 5.2%.

‘The issue of rental affordability’

The firm’s chief executive, Sam Reynolds, said: “With rent prices rising at a faster rate than earnings, the issue of rental affordability is only getting worse.

“This means tenants are under increasing financial pressure in day-to-day life, but also means that the ability for them to put money aside is dwindling.

“In turn, this means that any aspirations for home ownership are served a significant blow as people have less opportunity to save for a mortgage deposit.”

He added: “Unfortunately there is very little being done to address the issue and urgent action is needed if we’re to improve rental market affordability.”

The situation varies across regions

The research shows that the situation varies across regions, and while renters in London have seen their salaries grow slightly faster than rents – they are 7.4% better off, that’s not the case elsewhere.

In the East of England, salaries have risen by 27% but rents have surged by 43% – to make tenants there 16% worse off than they were a decade ago.

Similar disparities exist in other regions, with the South West, East Midlands, South East and North West all experiencing rent increases outpacing salary growth.

Only Yorkshire and Humber and the North East offer a slightly brighter picture, with salaries edging out rent hikes by a small margin.

As a result of these trends, the average proportion of income spent on rent in England has risen from 31.9% to 33.2% over the past decade.


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Comments

Cider Drinker

8:48 AM, 18th April 2024, About 2 months ago

Oh, it’s 34% this week. Last week, I’m sure it was i46%.

Minimum wage has increased by 76% over 10 years.

Profits from BTL have been wiped out by high interest rates. Many landlords are making significant losses.

Haven’t the government done well?

PAUL BARTLETT

12:06 PM, 18th May 2024, About a month ago

Reply to the comment left by Cider Drinker at 18/04/2024 - 08:48
Bank of England monetary policy Committee meets every three weeks and may hike the base rate 14 times consecutively.

Landlords are allowed one Section 13 Rent increase per Year after the AST begins.

Employees may get a hike six monthly or change Employers for better pay at any time.

Only the Landlord is locked into the Annual cycle and cannot respond to events.
Long term fixed rate mortgage required!

After Rental Reform Bill endless tenants who knows how long...

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