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UK PRS Rents Highest In EuropePRS Rents Still Increasing

Rent paid by tenants in the UK’s private rental sector, (PRS), increased by 2.1% in the 12 months up to and including March 2015, according to the latest published figures released by the Office for National Statistics (ONS), drawing claims from the National Housing Federation (NHF), that the UK is the most expensive country to rent property in within the European union.

In the 12 months to March 2015 UK PRS rents increased by:

  • 2.1% in England
  • 2.1% in Scotland
  • 0.8% in Wales

UK PRS rents are the highest in Europe, taking up 40% of tenant income despite having the shortest length of secure tenancies. In comparison our European counterparts only pay an average of 28% of their income on rent.

The NHF analysed the ONS data and found that on average UK PRS rents of approximately £750 per month for properties were almost double the rental costs of dwellings in countries like Germany and Holland, where average earnings are similar. However, it is worse for tenants in shared UK properties, who typically spent around 55% of their income on rent.

Across Europe, 43% of tenants had moved property in the last five years while in the UK this figure was more like 77%.

When the figures are analysed more closely it works out that approximately 23 minutes of every hour worked by UK PRS tenants is spent on rent; elsewhere in Europe, it is more like only 17 minutes.

The NHF also showed that the UK has repeatedly failed to invest in its own housing stock when compared to European standards, between 1996 and 2011 only 3% of the national Gross Domestic Product (GDP) was invested in UK housing, compared to 6% in Germany and 5% in France.

Other findings from the analysis include the fact that 72% of tenants renting in the UK private rental sector are employed compared to 62% of residential owner-occupiers.

NHF chief executive David Orr commented on the findings, stating: “UK tenants get a raw deal in comparison to their continental counterparts. High rents are just one symptom of the UK’s housing crisis, as a nation, we are simply not building enough houses due to under investment and problems with the land market.”

National Housing Federation Reveals Most Unaffordable UK Areas To Rent Property

National Housing Federation Reveals Most Unaffordable UK Areas To Rent Property

National Housing Federation Reveals
Most Unaffordable UK Areas To Rent Property

Towns and cities such as Oxford and Brighton have overtaken many London borough’s as the most unaffordable places in the UK to rent, according to the National Housing Federation.

London boroughs may have the monopoly on the most expensive rents in the UK’s private rental sector (PRS), but when factored against average local earnings, UK towns and cities such as Oxford, Brighton and Bath are calculated to be more unaffordable than many London boroughs.

The most expensive area outside of London is the Three Rivers area in Hertfordshire, where the average PRS rent swallows up over 50% of the average income of residents in the area.

Other places such as Oxford, South Bucks and Brighton are now more unaffordable than London boroughs such as Greenwich and Lewisham, with renters spending over half their salary on rent before they’ve covered any other bills.

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Landlords Urged Not To Discriminate Against Benefit Tenants

According to fresh research from the National Housing Federation, (NHF) there has been a 417,830 rise in the number of social (council) housing tenants over the past three years.

It has coincided with a significant decline in the number of landlords willing to let properties to tenants receiving housing benefit following the Government’s welfare reform and cuts to Local Housing Allowances (LHA), paid to tenants in private rented sector (PRS) accommodation.

Both the Residential Landlords Association (RLA) and the National Landlords Association (NLA) have already reported that many landlords have already withdrawn from the LHA market or are planning to do so.

This is a short sighted knee-jerk reaction as landlords fear losing out on healthy rental returns if they are housing tenants claiming housing benefit.

The LHA rate may have been capped but the government insist that such measures are necessary to help preserve the economy of the UK. Landlords can ask tenant’s to pay top up’s on their monthly rental which could come from the (up to) £25,000 worth of other benefits claimed by families.

It is almost as though the current Con-Dem coalition Government want to put private rented sector landlords out of business by squeezing from both ends, the difficulty in obtaining mortgages or even being able to re-mortgage and limiting the pool of potential tenants to only those who are employed earning enough to be able to afford to buy property themselves.

Is it the government’s big idea to get all benefit tenants to only live in social housing?

If that’s so then why continue to sell off social housing stock when there is already a national housing shortage?

Are all departments within government mute, or just stupid, do they not share information with each other?

Private sector landlords are in danger of being put out of business by the Government, we need to do something about it!

 

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