14% of private tenants spend majority of income on rent, research shows

One in seven private sector residents in England is paying more than half their total earnings on rent, the report from the Local Government Association (LGA) has shown.

Some 14% of private tenants are marking more than half their total income consumed up by rent, according to the Association, which said this limits people’s ability to save for a deposit to purchase and get their own house.

Before its annual conference this week, the LGA is asking for the building of a new wave of leased homes “that reflect what families can actually afford – no more than a third of total household incomes”.

The LGA’s study found 43% of private tenants in England consume more than 30% of their salary on rent.

It said councils should be given controls and access to funding “to resume their historic role as a major builder of affordable homes”.

The LGA said this involves being able to borrow to finance in housing and to keep 100% of the receipts from any houses they sell to replace them.

Its study was based on the Labour Force Survey, the Valuations Office Agency Private Rental Market Statistics and the English Housing Survey.

New research by Halifax discovered that across the UK, first-time buyers usually need to save a deposit of £32,899, rising to £106,577 in London.

Judith Blake, LGA housing spokeswoman, said: “When one in seven private renters are spending half their income on rent, it’s no wonder we have a rental logjam – with a shortage of homes with genuinely affordable rent, and young people struggling to have enough income left over to save for a deposit.

“A thriving private rented sector helps create a balanced mix of available housing.”

She stated a new wave of rental homes costing 30% of family income or less “would provide tenants with stability, reduce the squeeze on household incomes and help more people get on the housing ladder”.

A Department for Communities and Local Government (DCLG) spokesman said: “This Government is determined to make housing more affordable and we’re investing £7.1 billion in building more affordable homes.”

“We’ve already helped more than 400,000 households to home ownership through government-backed schemes since 2010, and the number of first-time buyers is at a nine-year annual high.

“Our Housing White Paper sets out further measures to build more homes, including our £3 billion Home Building Fund which will provide development finance for homes to rent and buy.”