Home Business Rent: 'We've got £1,750 a month and can't find anywhere'

Rent: 'We've got £1,750 a month and can't find anywhere'

by news

The average UK tenant now spends more than 28% of their pay before tax on rent, figures shared with the BBC show.
It means people are spending more of their wages on rent than at any other time in the last 10 years, according to property portal Zoopla.
Average rents for new lets have also risen, jumping 10.4% in a year making it harder for people to afford places.
Chris Ward and his girlfriend said they were struggling to find a rental in London despite a £1,750 a month budget.
"I don't have a car, I don't go on vacations, I can't save for property," the 31-year-old told the BBC. "There is necessary support for the poorest but young workers are also struggling now."
Richard Donnell, executive director at Zoopla, said there was signs of financial "stress" for tenants, particularly those on low incomes.
Rents have been growing faster than wages in the UK for nearly two years, according to the data, to which the BBC has been given exclusive access.
That has meant in the majority of the UK, affordability of renting has been at its worst for a decade.
Rent now typically accounts for 28.3% of income, compared with 27% on average for the past 10 years. A small rise in percentage terms can still have a significant effect on people's finances.
If a first-time buyer had a mortgage on the same property, that would take up 26% of pay, it said.
The chunk of income taken up by rent varies in different regions. Even in London, where rent has previously taken up a bigger proportion of wages, the cost still accounts for 40% of gross earnings – the highest in the UK.
Rents have been rising significantly for the last year. Although those on a fixed rent would not have seen a difference, those signing up to new contracts, or moving to a different property are likely to have seen big increases.
The pressure of rising mortgage rates faced by landlords, as well as higher demand for properties than the number made available, have combined to raise the costs for tenants.
The typical rise has been at more than 10%, compared with a year earlier, for 15 months in a row.
In April, rent in London was 13.5% higher than a year ago, in Scotland it was 13.1% higher, and the North West of England saw a 10.5% increase.
"The impact of higher rents is not uniform with those on low incomes bearing the brunt, with increasing signs of stress," Mr Donnell said.
Those trying to move from renting to buying their own home also face greater difficulty in securing a mortgage. Financial information service Moneyfacts said the number of deals available for someone offering a 5% deposit was down from 347 at the start of June last year to 199 now.
There's more on your renting rights and where to go for help here.
Mr Ward is among those renters feeling the squeeze, even though he is in a relatively well-paid job.
He said he and his girlfriend's £1,750 a month budget was regarded as low by agents, so they felt they were being priced out of London.
He said that the situation was all the more "absurd" because of the competition for properties. The couple are now considering getting a visa to work overseas, for a better quality of life.
One of the major reasons for higher rents is that there are lots of tenants chasing a smaller number of properties to rent.
Zoopla said that there are 20% to 40% fewer homes to rent in most regions than there were before the pandemic. Meanwhile there are many more tenants than has been seen on average over the last five years.
This was likely to become more acute as demand traditionally picks up during the summer months.
Edinburgh and Glasgow feature high on the rental league table, partly because they score highly on quality of life and strong job markets, but there's more going on behind those numbers.
The cities' universities have gone on a recruiting spree for foreign students, putting pressure on the rental market.
And the alliance of SNP with Scottish Green ministers in the Scottish government have risked distorting the market with rent controls.
A freeze in rents and evictions was introduced last September and lasted until March. Also to help households facing rising costs, there's now a 3% cap on rent increases until next March. Further and more permanent rent controls are expected in Holyrood legislation later this year, being drawn up by Green MSP and minister for tenants' rights Patrick Harvie.
However, there is no constraint on the rents at which landlords can advertise new tenancies. So according to property professionals, newly-advertised rents have risen, as landlords seek to protect their income against the impact of future constraints once tenants have moved in.
Zoopla's rental sector survey, published every three months, tracks the rents that landlords request when listing a property, but analysts also adjust the numbers to reflect the rent that is eventually agreed.
Homeowners have been hit by rising interest, and mortgage rates, and that has spilled over into the buy-to-let market – which often sees even higher mortgage rates.
Up to a third of landlords who have hefty mortgages are facing the biggest impact of rising interest rates, which are going up further than previously expected.
Last week estate agency Savills said landlords were making their lowest profits for 16 years as interest rates rose.
In a recent report, the Royal Institution of Chartered Surveyors (Rics) said that higher rates, and stricter laws, were pushing some landlords to consider selling up. That would create a further squeeze on availability and could, in turn, increase the cost of renting further.
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