Tenants are allocating a third of their income to pay for rent even before factoring in other expenses, showing no relief from the Chancellor’s Spring Budget, according to the CEO of HomeLet.
Compared to 2023, tenants are now spending 2.3% more of their income on rent, and this trend is rising annually.
Andy Halstead from HomeLet is pressing for immediate government intervention to aid both renters and landlords. He highlights the difficulty for many to afford homes right now, and notes that some do not aspire to become homeowners.
As property upkeep costs soar, rental rates have followed suit, putting tenants in a tough spot financially and leaving landlords with unpaid rent and empty properties.
He warns that the steadily increasing rent-to-income ratio, which has surpassed a third, indicates a concerning future for the industry unless there is broader support from the government that includes the rental market.
Renters find themselves paying nearly £20 more per month on average compared to January. For instance, in the South West, this increase works out to an additional £19 monthly, while in the North East, it’s an extra £10 monthly with a 5.72% yearly increase.
Following a three-month decrease, rent prices in the UK are on the rise again, although only slightly by 0.2%.
Halstead emphasizes that while government efforts to assist homebuyers are recognized, we must remember the nearly 5 million renters in the marketplace, many of whom are not looking to purchase homes. Renting offers flexibility and does not demand a significant deposit—a financial hurdle many can’t clear despite the availability of 95% mortgages, given the high average cost of UK homes at £264,400.
