Shelter, the British charity for homeless people, is warning that the price of renting a house in certain parts of the UK is now beyond the reach of many people.
Their Rent Watch survey, which pooled figures from the Valuation Office Agency and Office for National Statistics, suggests that as many 55% of local authority areas now cost too much for working families to rent in. They consider any rental price above one third of a person’s income to be unaffordable: in 8% of areas, the cost of renting was more than 50% of salary, making the price “extremely unaffordable”. In Oxford, prices reached as much as 55% of salary.
Only 12% of the country’s rental property is currently priced at a level which Shelter say is affordable.
The average rent for a two bedroom property in London is now £1,360, while in the rest of the UK, it is around £570. The most expensive place to live is the London borough of Chelsea, with the monthly rent for a two bedroom house currently averaging out at more than £2,700. The most expensive area in the North of England is Blackpool, with the most affordable being Burnley in Lancashire.
Shelter say that prices have considered at 1.5 times the rate of salary increase between 1997 and 2007, and rural areas are particularly expensive. The lack of affordable housing is driving more and more families into urban areas, forcing some to move their children from school to school. Campbell Robb, the chief executive of Shelter, said that people were cutting back on essential spending such as grocery shopping in order to cover their rent.
Costs have been driven up by a lack of properties and an increase in repossessions. Many people who would potentially be interesting in buying a house are renting; first time buyers cannot afford the deposit for a mortgage as lenders impose increasingly strict lending criteria.
Experts believe the government now needs to step in to regulate prices before the cost of renting spirals out of control. Schemes to encourage development of new homes are already in place, with the potential for 100,000 new properties being built in the next three to four years.
More than 1,400 private landlords in the UK create problems for local councils, with a 25% increase in complaints in the last year alone.