England: The total amount of rent by tenants in the UK has soared to more than double
It reveals that the millennial generation, born between 1977 and 1995, are shouldering the largest part of the rise in rental costs. Countrywide estimated they spent £30.2bn on rent in 2017, or three times the £9.7bn paid in 2007. With many tenants paying more than half their salary in rents, campaigners said rent controls are now urgently needed.
Dan Wilson Craw of Generation Rent said: “The private rental market has not only doubled in the past decade, but it is costing the economy more. With social housing unavailable and home ownership out of reach, millions of people have no option but to rent from a private landlord.
Countrywide attributed the surge in overall rent being paid to increases in the number of households renting, and inflation-busting rent increases in most years. “Despite average rents falling in 2008, the total amount of rent paid by tenants has risen in every year for the last decade as the number of people renting has grown,” it said.
The typical private tenant in England paid rent of £192 a week to their landlord in 2016-17, compared with £102 for tenants in the social and council house sector. In London, private rents average £309 a week compared with the £132 paid by council tenants.
The beneficiaries of the rental boom are likely to be buy-to-let landlords who have increasingly displaced first-time buyers over the past two decades. There are estimated to be around two million landlords in the UK, owning around 5m properties.
Analysis by the Council of Mortgage Lenders in December 2016 found that the average rental income earned by a buy-to-let landlord is around £20,000 a year, although the averages are skewed by a small number of landlords that own large portfolios of properties.
Ongoing tax changes, however, have put a brake on the rapid expansion of the buy-to-let market. Nationwide building society, whose The Mortgage Works arm is one of the biggest lenders to landlords, said last week that mortgage advances were down by a third on the year before.
Landlords are facing higher taxes on their rental incomes, additional stamp duty, and tougher lending criteria when applying for loans.