‘Cost of rent day’ looms for English renters as income swallowed by soaring housing costs – UK Times

Renters across England are currently reaching their “cost of rent day”, a stark financial milestone where the equivalent of over four months’ income has been swallowed by rental payments.

Campaign groups Generation Rent and the Renters’ Reform Coalition are urging immediate action to “slam the brakes” on surging rental prices.

This “cost of rent day” marks the point in the year when, on average, all of a renter’s annual income earned to that date has been consumed by payments to their landlord.

The calculation correlates the average percentage of income spent on rent with the same proportion of the calendar year.

Office for National Statistics (ONS) figures indicate that private renters on a median household income typically spend around 36 per cent of their earnings on an average-priced rented home in England.

The financial burden is even more acute in some major cities. Renters in London, for example, typically do not reach their “cost of rent day” until 2 June, while those in Bristol face a wait until 13 June.

In the London borough of Kensington and Chelsea, this critical date extends significantly further, not arriving until 26 September, according to the analysis.

Ben Twomey, chief executive of Generation Rent, said: “Homes are the foundations of our lives.

“But when we are forced to spend too much of our income on rent, it means children are going to school hungry or older renters who can’t afford to turn the heating on.

“High rents trap people in homelessness and suck money out of local communities.

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

ADVERTISEMENT

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

ADVERTISEMENT

“It’s not right that over four months of our income every year is being swallowed up by landlords.”

He added: “Renters in some of our biggest cities are facing the most back-breaking costs.

“The Government must urgently give metro mayors the power to slam the brakes on soaring rents through limiting rent increases.”

Reforms introduced by the Government in April in England have given private tenants a range of stronger protections, including fairer rent rules, with landlords only able to raise rents once a year and tenants able to challenge hikes they believe are unfair.

The Renters’ Rights Act also signals the end of section 21 “no fault” evictions, meaning private landlords will not be able to evict tenants without a valid justification.

Clara Collingwood, director at the Renters’ Reform Coalition, said: “While section 21 evictions have finally been banned in England, for many renters unaffordable rent increases will have exactly the same effect, forcing people out of their homes and communities.

“The Government need to take real action to make renting more affordable and get a grip on out-of-control rents – relying on housebuilding alone won’t get the job done.”

The campaigners quoted a renter in London who said: “Both my husband and I are working full-time, I even work another job on the weekends, but we have no money left over at the end of each month.

“The fairytale of working hard to be able to buy a home is gone.”

The research was released as a separate report from the Institute for Public Policy Research (IPPR) estimated that 2.4 million households in the UK’s private rented sector are facing unaffordable housing costs.

The IPPR warned this could grow to 2.5 million by the end of the current parliament.

Three-quarters of working-age renters with affordability issues are in working households, it estimated.

Unaffordable housing costs were defined as households spending 30 per cent or more of their post-tax, post-benefits income on rent.

The report argued that recent global shocks, such as inflation and rising interest rates, have been passed from landlords directly onto renters.

The think-tank recommended that rents could be stabilised with annual rent increases limited by a “double lock” linked to whichever is lower out of inflation or wage growth.

Dr Maya Singer Hobbs, senior research fellow at the IPPR, said: “Millions of renters are being pushed to the brink by a housing market that simply isn’t working for them.

“This is no longer a marginal issue affecting a small group – it is a mainstream cost-of-living crisis hitting working households across the country.

“Without action, things will get worse. The current system leaves renters exposed to global shocks and rising costs they have no power to control.”

A Ministry of Housing, Communities and Local Government spokesperson said: “Our Renters’ Rights Act is giving millions of tenants stronger rights and more security in their homes.

“That includes stronger powers to challenge rent increases that are above market rate, meaning they can live without fear of their landlord unfairly hiking rent.”

Here are some typical estimated cost of rent days across selected cities and towns, according to calculations from Generation Rent, showing how the proportion of incomes swallowed up by rent varies significantly in different locations: