UK’s poor have seen the highest rent increases in last decade

THE UK’s rental housing market boom has hit the most deprived families disproportionately hard, according to an analysis of census data, in the latest example of why the country’s poorest are particularly suffering during the cost of living crisis.

The total amount of rent paid by households in the most disadvantaged parts of England and Wales has more than doubled over the last decade up to 2022, according to research by property firm Hamptons International, published on Monday (Jan 16).

Prices in the UK’s private rented sector, which accounts for roughly one in five households, have rocketed in the past two years as a post-Covid surge in demand met with a shortage of homes available in the market. The annual rent increase for a newly-let home across Great Britain in December was 7.7 per cent.

That’s weighing particularly heavily on people with the lowest incomes. Almost a quarter of households in the poorest 10 per cent of the country rent privately, compared to 13 per cent who rent in the most affluent areas. Families in the former group have seen their rental costs rise by 50 per cent between 2012 and 2022, a faster increase than any other group.

“Growth in the private rented sector over the last decade has come on the back of fewer younger people buying their own home, particularly in the less affluent areas,” said Aneisha Beveridge, head of research at Hamptons.

Government initiatives aimed at boosting homeownership have often helped the wealthiest, she said. At the same time, uncertainty around borrowing costs is also causing concern for homeowners and new buyers.

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Mortgage rates have surged in Britain since then-Prime Minister Liz Truss’s September mini-budget sent key home loan costs to highs of 6.65 per cent. While rates have since stabilised below 6 per cent, higher borrowing costs are threatening to trigger a decline in house prices this year.

Private renters spend a higher proportion of their household income on accommodation than both homeowners and people in social housing, figures from the latest English Housing Survey shows. They are also more likely to struggle with rent than those paying a mortgage, with a quarter finding it difficult to afford payments in 2020-21.

Many households on the lowest incomes were dragged into debt during the pandemic and have since faced spiralling costs as inflation hit a 40-year high. This has led to 7.2 million households skipping on meals, showers or sufficient clothing, according to a December report by the Joseph Rowntree Foundation. BLOOMBERG