New research shows that renters are more vulnerable to economic shocks compared to homeowners.
Renters typically spend a higher proportion of their budget on essential items that cannot be cut back, with 61% of the usual weekly budget spent on essentials, compared to 52% with homeowners, according to a new report from the Office of National Statistics (ONS).
This is largely driven by housing costs, which account for 28% of budgets for renting households and 21% for homeowners.
According to a survey by the Resolution Foundation, renters are more likely than homeowners to have fallen behind with their housing payments during the lockdown. They have been less likely to receive a payment holiday on their rent, as opposed to those with a mortgage.
The data from the ONS also reveals that spending on activities including holidays and eating out is proportionally lower among renters, potentially limiting their ability to manage housing costs alongside a loss of income.
Franz Doerr, CEO of flatfair, commented: “Today's figures from the Office of National Statistics do not come as a great surprise, but underline the threat that coronavirus poses to the rental market.
“Renters do not have as much breathing room to cut back on spending, leaving them vulnerable to economic shocks. While it is positive that the government has further extended the moratorium on evictions, they cannot just keep kicking the can down the road.
“Action needs to be taken to support tenants and landlords alike to communicate, and ensure that a fair and equitable solution is found in the unfortunate cases where a tenant cannot pay their rent.”