Young Tenants Spend Half of Their Wages on Rent

Young tenants in Britain are forced to spend around half of their wages on rent, a new report has claimed.

Young Tenants Spend Half of Their Wages on Rent

A single working tenant aged between 22-29 and renting a one-bedroom property spends an average of 48% of their taxed income on keeping a roof over their head, according to the study by Countrywide.

The property firm found that the amount of income that tenants spend on rent is up by 3% on 2007. However, in London, young tenants typically pay 57% of their earnings on rent, up by 16% over the same period.

The average cost of renting a one-bedroom home in Britain is £749 per month, while in the capital it soars to £1,133.

A spokesperson for Countrywide comments: “In London, rents have risen much faster than wages, stretching affordability. Many have adapted by moving to cheaper areas or sharing.”

However, away from the capital, the proportion of income taken up by rent is lower than it was in 2007 in many parts of the country, found Countrywide.

In the North East, the cost of a one-bedroom property accounts for 35% of a young tenant’s post-tax income, down from 42% in 2007.

Young renters in Scotland, Yorkshire and the Humber, the East Midlands, South East and South West have also experienced falls in the proportion of income being eaten up by rent.

Positively, new data also shows that the amount of tenants in serious rent arrears has dropped, as employment levels remain high. However, the private rental sector continues to grow, meaning that supply levels and the Government’s crackdown on buy-to-let could push rent prices higher.

Tenants may be facing some good news, however, as the proposed Renters’ Rights Bill was unopposed in the House of Lords on Friday. The bill plans to abolish letting agent fees charged to tenants, making the renting process cheaper.