The amount tenants spend of their income on rent jumped to 29.6% at the end of August from 27% a year ago, according to official data.
Accommodation costs for renters were 26.4% of income, demonstrating that these costs have lifted within the two years, points out the latest Office for National Statistics ‘Economic activity and social change in the UK, real-time indicators’ report.
Hargreaves Lansdown head of personal finance Sarah Coles says: “There’s no let up in the squeeze on renters.
“They’re now spending a far higher percentage of their income on keeping a roof over their head, and the proportion of their income they’re having to hand to the landlord is rising faster than at any other time in the past five years.
“Attention has been focused on the pressure on those with mortgages now that interest rates have risen, but compared to renters, they have nothing to worry about.”
Coles points out that the HL Savings & Resilience Barometer in July found that borrowers who remortgaged onto a higher rate between the end of 2022 and the middle of 2024 have an average of just £315 left at the end of the month — £95 less than those who are yet to remortgage.
However, renters have just £79 left at the end of the month.
Among its measures, it seeks to curb rent costs by banning “in-tenancy rent increases,” which will mean that landlords will only be allowed to raise the rent once a year, and to the market rate.
It also plans to crack down on rental bidding wars, by requiring landlords and letting agents to publish an asking rent for properties. After this, they will not be allowed to ask or accept bids above this price.
