MAY 08, 2017 | BY A & S Property
Cash-strapped millenials renting in the UK are struggling to live alone
Young private renters are facing staggering new hurdles to simply live alone and make a decent wage, new research shows.
Those attempting to live alone now face the prospect of having to spend more than two-thirds of their monthly take home pay of £17,359 on rental payments, according to the latest Landbay Rental Index.
For tenants aged between 18 and 39 and living alone, 69% of a monthly post-tax income of £1,447 is spent on £1,012 of rent.
In a shared house of two people, overall rent of £1,152 adds up to 39% of each tenant’s income, while those co-habiting in a three-bedroom property would each spend 30% of their monthly take home pay on a rent of £1,322.
Despite the pace of growth beginning to slow over the past 18 months or so, rents have increased by 9% over the past five years, with the Landbay Rental Index for April showing that the average rent now costs £1,191 per month.
With rental payments accounting for a large proportion of income, the latest figures suggest that Generation Rent are left with little to save for a home of their own, especially when taking additional expenses, such as food, travel, utilities, and holidays, into consideration.
John Goodall, CEO and founder of Landbay, said: “For intermediaries, this generation is the future of their client base, a generation who will face a tough financial journey.”
“Whether these millennial tenants are renting as a stepping stone on the way to home ownership – or in some cases choosing to rent for life – this generation are relying on a well-served buy-to-let market to ensure rental growth doesn’t become unbearable.”
Goodall wants to see the next government commit to improving standards, affordability and the supply of rental properties in the private rented sector.
He added: “Institutional investment and the subsequent growth and professionalisation of the private rental sector are already helping control rental growth and improve living standards for renters, so we hope to see some clear plans outlined in this month’s party manifestos ahead of the General Election in June.”
UK Rental Index
UK Rental Index by number of beds
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