UK private renters pay double the European average
Britain’s private rents are the highest in Europe, take up the biggest chunk of people’s salaries and are among the least secure, according to new analysis by the National Housing Federation.
UK rents average €902(£750) per month in comparison to the European average of €481(£400). In countries like Germany and Holland, where earnings are similar, private rents are around 50 per cent cheaper than in the UK (€600 and €625 respectively).
These sky-high rents also take up the largest share in Europe of people’s pay cheques, leaving families with less money left over to save for a home of their own. Private renters spend almost 40 per cent of their income on paying their rent in comparison to the European average of 28 per cent. Around 23 minutes of every hour worked is spent on rent; elsewhere in Europe, it’s just 17 minutes.
What’s more, the UK rental market has the shortest tenancies in Europe. Across Europe, less than half (43 per cent) of renters had moved in the last five years, while in Britain more than 3 in 4 (77 per cent) had.
By European standards, UK has persistently underinvested in housing. Between 1996 and 2011 in the UK, just 3 per cent of national GDP was invested in housing, compared to 6 per cent in Germany and 5 per cent in France.
David Orr, chief executive at the National Housing Federation, said the UK needs to build 245,000 new homes a year to keep up with growing demand and even more to clear the back-log.
He added: “British renters get a raw deal in comparison to their continental counterparts. Not only do they face crippling rents, but renters in the UK have almost no certainty about whether they will be able to stay in their home from one year to the next. How can we expect people to raise families, start businesses or save for their first home if they don’t even know where they will be able to afford to live?
“High rents are just one symptom of the housing crisis, we are simply not building enough due to under investment and problems with the land market. Housing associations are already helping people across the housing market meet their aspirations, including private renters. But they want to do more.”
The analysis follows new figures from lettings agent network Your Move which revealed that Scottish rents 2.7 per cent higher than a year ago.
The latest Buy-to-Let Index showed that average rents in Scotland reached a new peak in May after a record monthly increase.
An all-time high of £544 per month was reached following a 1.0 per cent boost last month.
The rise was powered by a 1.9 per cent monthly increase in the south of Scotland during the month — the biggest regional change.
May’s increase represents the strongest monthly uplift on record and means typical residential rents have now risen 2.7 per cent (equivalent to £14) in the past year — the fastest annual increase in rental prices for nine months.