Renters struggle with renting budgets as costs soar

Renters struggle with renting budgets as costs soar

9:26 AM, 27th August 2024, About a month ago 3

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Renters are having to find an extra £312 per year to cover the cost of rent that exceeds their budget, according to a new survey.

Research by SpareRoom shows a big gap between what renters plan to spend on rent each month and what they actually end up paying.

Across 216 towns and cities in the UK, 71% of renters are paying more than they budgeted for.

Tenants going over their set budget

Of 216 towns and cities analysed around the UK, renters in only 63 areas pay rent that falls within their allocated budget, whilst tenants in 153 areas go over their set budget every single month to be able to afford their rent.

The greatest disparity between budgeted and actual rental costs was found in London. In West Central London, renters are spending £344 more per month than they had budgeted, followed by East Central London, where renters are exceeding their budget by £245 each month.

Bolting the stable door after the horse has long gone

Matt Hutchinson, director at SpareRoom, said: “We tend to look to average rents to see how the market is performing, but that only tells half the story. It doesn’t tell us how genuinely affordable those rents are.

“This data reveals that in a staggering 71% of towns and cities around the UK, rent has increased to the extent that prices are higher than renters’ budgets. That means renters are being ever more squeezed, at a time when the cost of living is hard enough already.

“That’s why, although rent caps are a good idea in principle, they’re really a case of bolting the stable door after the horse has long gone. We need renting to be genuinely affordable, otherwise people end up trapped and unwilling to move. The knock-on effect for the economy of having an inflexible, rent-burdened workforce will be huge.”

Edinburgh sees tenants paying £145 over ideal budget

Outside of London, Edinburgh sees tenants paying £145 over their ideal budget, with renters going £122 over in Great Yarmouth and £121 in Kirkcaldy.

Looking at the other end of the scale, people living in Dewsbury spend £75 less than budgeted on rent every month, followed by Newtownabbey (£65), Livingston (£62) and Littlehampton (£59).

Liverpool (£525), Preston (£496), Leamington Spa (£629) and Blackburn (£498) are the only towns and cities in the UK where the budget set aside for rent every month is exactly the same as the rental costs themselves.


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Cider Drinker

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11:24 AM, 27th August 2024, About a month ago

Tenants need to learn to budget better. Optimism bias is their problem.

Those that cannot afford to live in West London should move to Middlesbrough.

northern landlord

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18:25 PM, 27th August 2024, About a month ago

New rents are decided by market forces. Landlords faced with an uncertain possibly bleak future and increasing costs are running scared and selling up either by actively evicting or not re-letting when a property becomes naturally vacant. Supply drops rents go up- that is business and the PRS is a business not a social housing provider. There are only two reasons to be in business fun, (sadly lacking in the PRS these days) or profit. Only when properties that are put up for rent fail to let will rental prices drop. No sign of that happening yet except maybe in London.

Beaver

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14:23 PM, 28th August 2024, About a month ago

Reply to the comment left by northern landlord at 27/08/2024 - 18:25
This is true. And labour can't build their way out of the problem.

Two decades ago John Prescott hailed the Thames Gateway project as a solution to the then housing crisis. Then the water companies told him that there wasn't enough water in the South East:

https://www.theguardian.com/society/2004/nov/24/housingdemand.politics

Water UK have just said something similar. If labour wants to build those houses (including the 50% affordable houses that Angela Rayner says she is going to target developers to build) somebody has to pay for the water and sewerage:

https://www.theguardian.com/business/article/2024/aug/28/water-bills-must-rise-if-labour-is-to-hit-housebuilding-target-industry-claims

There is of course an environmental impact from both the houses themselves, increased rate of rain-water run-off, domestic water consumption, over extraction of water from natural watercourses to supply domestic demand in areas that are already short, and also from inadequate sewage provision.

Labour hasn't got enough money to pay for above inflation pay increases to PSWs like ASLEF members and junior doctors. And labour doesn't have enough money to be attacking the Private Rented Sector. If it does so it will drive investment out of the sector and drive rents up.

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