Recent figures from the National Housing Federation (NHF) suggest that tenants currently spend just over 39% of their income on rent.
This compares with the European average of 28%, which confirms the UK as one of the most expensive places to rent on the continent. UK monthly rent payments averaged £750 per month, compared with the European average of just £400.
To make things worse for tenants, the NHF also revealed that the UK had some of the shortest tenancies in Europe, creating a renting climate of expense and insecurity. This is in startling contrast to countries such as Germany and Holland, where despite similar average salaries, tenants are facing costs a full 50% cheaper than in the UK.
David Orr, chief executive of the NHF, voiced his concerns: “How can we expect people to raise families, start businesses or save for their first home […] high rents
are just one symptom of the housing crisis”. Mr Orr also added that by European standards, the UK had underinvested in housing, with just 3% of national GDP being spent between 1996 and 2011. Germany on the other hand, a country with an enviable renting culture, doubled the UK’s expenditure with 6% GDP invested in the same time period.
Homeowners on the other hand, have been benefiting greatly from the fierce competition between lenders, as they develop their products to entice those looking to climb onto the property ladder. With rent prices high and mortgage rates low, getting onto the property ladder for first-time buyers is currently both rewarding and difficult.