Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

The average private tenant in England has spent more than £40,000 on rent over the last five years, according to a new report from homelessness charity Shelter.

The findings arrive as the Housing and Planning Bill continues making its way through the House of Lords today.

Shelter found that the average cost of renting a two-bedroom property is enough to put down a 20% deposit on a typical first time buyer home.

In London, the average rent on a two-bed home is much higher, at £89,000, according to the charity’s calculations.

The Chief Executive of Shelter, Campbell Robb, says: “Our drastic shortage of affordable homes is leaving millions of people stuck in their childhood bedrooms in a bid to save money, or in expensive and unstable private renting, with little hope of ever saving for a home to put down roots in.”¹ 

The Housing and Planning Bill seeks to introduce a series of changes that David Cameron believes will turn generation rent into generation buy.

It includes extending the Right to Buy scheme to housing association tenants, which Shelter says will aggravate the housing shortage.

Councils would be forced to fund the policy by selling off their most high-value assets. However, peers are warning that the policy could lead to a decline in the supply of affordable homes.

Average Tenant Has Spent £40,000 on Rent in the Last Five Years, Says Shelter

Cross-bench peer Lord Kerslake, the former head of the Government’s Homes and Communities Agency, warns: “It’s very hard to make the numbers work and it’s very hard to find the land.”

Lord Kerslake has jointly tabled an amendment to the Housing and Planning Bill, which would force councils to replace the properties sold off with similar homes in their own area.

Peers are also expressing their concerns over the Government’s Starter Homes scheme.

These new build homes would be sold at a 20% discount to first time buyers under 40. The properties can be worth up to £450,000 in London and £250,000 elsewhere.

However, by urging housebuilders to prioritise Starter Homes, there are concerns that local authorities will throw out genuine affordable housing.

Kerslake comments that the policy would be a “cash bonanza” for homebuyers, many of whom could have bought their own home without the scheme.

“It’s a hell of an offer for people who have to be reasonably well-heeled to afford it,”¹ he states.

A study by the Town and Country Planning Association has revealed that four out of five councils do not believe that Starter Homes are affordable.

Dame Kate Barker, who conducted a review of housing supply for Gordon Brown, told the House of Lords Economic Affairs Committee in December: “I do feel uncomfortable about a set of policies that are designed to be supportive of people who are just on the cusp of being able to buy and need nudging over the edge.”¹

And the Shadow Housing Minister, John Healey, has said: “The forced sale of council homes will lead to a huge, irreversible loss of genuinely affordable homes to buy and rent.

“At a time when more affordable homes are desperately needed, the Government is forcing the sale of many of those that are left – not to tenants, but to buy-to-let landlords and overseas speculators.

“This will make finding an affordable home even harder for young people and families on ordinary incomes. But it’s also bad news for taxpayers, because it means more people renting privately and housing benefit rising to cover the cost.”¹

However, a spokesperson for the Department for Communities and Local Government insists: “The Government is also supporting the boldest plan for housing by any government since the 1970s and is creating a bigger, better private rented sector that will increase choice for tenants.”¹

Recent research found that the private rental sector is expected to grow to 30% of all households in the next 30 years.

¹ http://www.theguardian.com/society/2016/mar/03/tenant-paid-40000-rent-five-years-shelter