People in their 20s who want to rent a place for themselves face having to pay out an “unaffordable” amount in two-thirds of Britain, BBC research shows. They face financial strain as average rents for a one-bedroom home eat up more than 30% of their typical salary in 65% of British postcode areas.
Many housing organisations regard spending more than a third of income on rent as unaffordable and the research reveals that a salary of £51,200 is needed to “afford” to rent a one-bed London home. Even flat-sharing – the choice of many young people – does not completely resolve the issue as 12% of postcode areas in Britain remain “unaffordable” for two people in their 20s sharing a two-bedroom home.
Analysis produced by the BBC’s data team shows that a gross annual income of £24,800 would be needed for the average one-bedroom rental flat in England to become affordable under the 30% measure. In Scotland £20,700 is needed and in Wales £17,600. Many people can pay more than 30% of income on rent, but housing organisations say this puts considerable strain on the rest of their finances. Compare this to 1980 when UK private renters spent an average of 10% of their income on rent, or 14% in London. There was, however, at that time many more people renting from councils or in social housing at that time.
On the flip side, landlords have also faced increased costs, including their mortgages, insurance, maintenance and licensing, that need to be covered from rents. These costs have increased as the government introduces new measures such as the removal of mortgage interest relief and changes to stamp duty. This has meant that a number of landlords have been reducing their properties as their businesses become less financially viable, resulting in fewer properties available to rent, while demand for properties across the UK remains high.
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