Britain’s private renters are getting a rough ride in contrast to their European counterparts, new analysis by the National Housing Federation shows.
Rents in the UK are the highest in Europe, take up the biggest chunk of people’s salaries and are among the least secure. The news comes as the nationwide value of buy-to-let properties nears £1 trillion.
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% 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% of their income on paying their rent in comparison to the European average of 28%. 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%) of renters had moved in the past five years, while in Britain more than three in four (77%) had.
By European standards, UK has persistently underinvested in housing. Between 1996 and 2011 in the UK, just 3% of national GDP was invested in housing, compared to 6% in Germany and 5% in France. We need to build 245,000 new homes a year to keep up with growing demand and even more to clear the backlog.
David Orr, chief executive at the National Housing Federation, said: “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. By 2033 they want to build 120,000 new homes of all types every year. The Government can empower housing associations to do this by freeing up land and providing proper investment.”