Housing costs squeeze renters’ disposable income

Renters are more likely to struggle with housing costs than homeowners.

According to Barclays, one in four (26%) renters currently find it hard to afford their monthly payments.

That compares with one in six (15%) homeowners who feel this way about their mortgage.

Figures also showed that renters are paying almost a third (30.8%) of their take-home pay on housing.

By contrast, homeowners are spending just over a quarter (26.6%) of their earnings on their mortgage.

Income gaps widen the financial strain on renters

Renters are more likely to be struggling with their housing costs than homeowners partly because they’re typically on lower incomes.

Figures from Barclays show that the average gross income for homeowners is £37,775.

That compares with £23,562 for renters.

Rising rents are another problem that’s adding to the pressure on tenants.

Nearly two-thirds of renters (62%) have seen or expect to see their rent go up this year.

Financial pressures hitting renters’ confidence

This is having a knock-on effect on renters’ financial choices.

For example, almost half (45%) say they’ve had to change their spending habits just to keep up with rent.

Many are also being put off trying to get on the property ladder, as they feel it’s becoming out of reach.

The number of renters saving for a deposit fell to 17% last month, down from 31% in January.

And just 12% feel they’ll be able to buy a property within the next year.

Are you struggling with rental costs?

If you’re finding it hard to keep up with your rent, then options are available.

Our budget calculator can help you identify where possible savings can be made, so you can prioritise your spending and free up cash for vital expenses.

It’s also worth using our benefits calculator to find out if you’re getting all the state support you might be eligible for.

We’ve also put together some useful money saving tips for people living in rented accommodation.