A new survey by business consultancy Hargreaves Lansdown suggests that out of the 20 per cent of households who now rent privately, almost four in 10 exact to rent for their entire lives.
Hargreaves Lansdown says private renters spend some 31 per cent of their income (including housing support) on rent, while those with mortgages spend 18 per cent.
And private renters spend £198 on weekly housing costs (£340 in London) – compared to £174 for those with mortgages.
Around a quarter find it hard to pay rent, a figure that rises to over a third amongst the poorest earners. Only 55 per cent of private renters had savings – compared to 81 per cent of owner/occupiers.
Half of those without savings expect to rent for the rest of their lives.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, says: “Millions of people are caught in the rental trap – paying a small fortune to keep a roof over their head, and struggling to save, while prices soar even further out of reach. Almost two in five private renters never expect to be able to afford a home of their own, which raises enormous challenges throughout their lives.
“Among those who rented privately, the huge burden of rent meant that housing costs swallowed almost a third of their income, compared to property owners for whom it made up less than a fifth. It meant that one in four of them were struggling to pay the rent, let alone save anything for the future. This was back in 2020/21, well before runaway rents and massive inflation made everything so much harder.
“Even back then, only just over half of renters were able to save anything, which reflects the findings of the Hargreaves Lansdown Savings and Resilience Barometer, which found renters were less likely to have money left over at the end of the month, and less likely to have savings to fall back on.
“What’s even more alarming is that the Barometer forecasts that over the next 12 months, things are going to get even tougher for renters.
And it’s not just the cost, renters are also at the mercy of their landlord, and when they chose to raise the rent or sell the property altogether. Three quarters of private renters moved by choice in 2020/21, but six per cent were asked to leave – and of those, 63 per cent said it was because the landlord wanted to sell.
“This is hard enough at any age, but we’re renting later in life, which makes the upheaval even more difficult to live with. In 2021/21, although 21 per cent of private renters were aged 35 to 44, 17 per cent were aged 45 to 54, and nine per cent were aged 65 and over. What’s more, by this stage we may have families to uproot. Just under one in five private renters were couples with children and just over one in 10 were single parents.”