New research has found that one in seven private renters are spending more than half of their total income on rent, compared to just 2% of homeowners with a mortgage.
The Local Government Association said that high house prices and rents are making it more difficult for young people to save a deposit to buy their first home – with the average deposit now costing 71% of a first time buyer’s annual income.
The research also revealed that four out of 10 private renters spend more than 30% of their income on rent, compared to just 11% with a mortgage.
The average UK private rent is currently £852.
Previous LGA research revealed under-25s today are now half as likely to be homeowners than 20 years ago.
The LGA is calling for the Government to enable the building of a new wave of rented homes that reflect what families can actually afford – no more than a third of total household incomes.
It said councils also need to be given the powers and access to funding to resume their role as a major builder of affordable homes – including those for social and affordable rents. This means being able to borrow to invest in housing and to keep 100% of the receipts from any homes they sell to replace them.
Councillor Judith Blake, LGA Housing spokesperson, said: “When one in seven private renters are spending half their income on rent, it’s no wonder we have a rental logjam – with a shortage of homes with genuinely affordable rent, and young people struggling to have enough income left over to save for a deposit.
“A thriving private rented sector helps create a balanced mix of available housing. A new wave of genuinely affordable homes for rental, that costs 30 per cent of household income or less, would provide tenants with stability, reduce the squeeze on household incomes and help more people get on the housing ladder.
“Only an increase of all types of housing – including those for affordable or social rent – will solve our housing shortage and a renaissance in house building by councils is ultimately needed if we are to boost affordability.
“For that to happen, councils must be able to borrow to invest in housing and replace sold homes and reinvest in building more of the genuine affordable homes our communities desperately need.”
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