Private renting unaffordable for working families on low wages in 67% of the country says Shelter research

Tuesday, 9 July 2019 00:01

In two-thirds of the country, working families on low wages could not afford to privately rent a typical home without turning to housing benefit, Shelter’s new research shows. The housing charity analysed average private rents for two-bedroom homes in every local council area in England to assess whether they would be affordable to working families in lower paid jobs - with one adult working full-time and another part-time. There are approximately 1.5 million working...Request free trial

In two-thirds of the country, working families on low wages could not afford to privately rent a typical home without turning to housing benefit, Shelter’s new research shows.

The housing charity analysed average private rents for two-bedroom homes in every local council area in England to assess whether they would be affordable to working families in lower paid jobs - with one adult working full-time and another part-time. There are approximately 1.5 million working families living in privately rented homes.

The findings reveal that – excluding housing benefit – there are 218 council areas where local families earning a low wage would be forced to spend more than 30% of their salary on rent. In 112 of these (35% of areas) this rises to more than 40%.

Further exposing the depths of England’s ‘rent trap’, Shelter mapped the hotspots where private renting is the least affordable. Kensington and Chelsea topped the list with the average rent in the borough equivalent to 127% of a low earning family’s take-home pay. This is closely followed by Westminster at 111% and Camden where rents swallow 92% of pay.

However, it is not only the capital where the picture is bleak. In Cambridge, a family would have to fork out 61% of their wages on an average rent, versus 57% in Oxford and 50% in Bristol - and that’s before paying for any other essential costs like childcare, food or utility bills.

Additional analysis of rent costs for families with only one full-time worker on a low wage proved even more shocking. In 320 areas (98% of the country), those living off one income would be forced to spend more than 30% of their pay on rent. In 228 of these (70% of areas) this rises to more than 40%.

The charity argues that if the government invested in a new generation of social homes, working families would not need to rely on a faulty housing benefit system to keep a roof over their heads. To demonstrate this, it carried out a comparable analysis of social rents.

In stark contrast to private renting, social rents were found to be affordable for working families on low wages in 100% of the country. The maximum a family with one full and one part-time worker would have to spend on social rent is 26% in Hertsmere, versus just 13% in Hastings.

With the latest government figures showing almost £8 billion was paid out in housing benefit to private landlords in 2017/18 – Shelter is calling on the next Prime Minister to deliver 3.1 million social homes over twenty years as a more sustainable solution to the housing crisis.

Polly Neate, chief executive of Shelter, said: “Families in lower-paid jobs are having their bank balances bled dry by expensive private rents across huge swathes of the country.

“The steep decline in social housing has left a growing number of families caught in a debilitating ‘rent-trap’. It’s disgraceful that despite working every hour they can, many parents are now forced to rely on housing benefit to keep a roof over their children’s heads.

“It makes no sense to continue haemorrhaging billions of pounds in housing benefit to private landlords, when the government could support families by investing in a sustainable, long-term solution to the housing emergency instead.

“The next Prime Minister, whoever that may be, needs to realise social housing is the best cure to the affordability crisis we face. The delivery of 3.1 million new social homes over the next twenty years is the only way to lift millions out of housing poverty and into a stable home.”

Case study: Lauren, 48, lives with her teenage daughter near Brighton and works as a dance teacher, therapist and wellbeing coach at a university. The high-cost of private renting left her struggling financially for years until she managed to secure a social home at the end of 2018.

Lauren said: “I have counted my blessings every day since I moved into my council bungalow. Renting privately left me paralysed with fear - I couldn’t see a future without benefits and was constantly worried that my landlord would put my rent up. Now it feels like a weight has been lifted off my shoulders.

“Obviously, I am still conscious about my outgoings especially what I spend on any kind of treats – I’ll very rarely go out for a coffee when I can have a nice cup of tea at home. But at least I have a bit of flex around my finances. Our bungalow has brought so much joy and security to myself and my daughter - everyone deserves a home that makes them feel safe.”

Photos available.

ENDS

Shelter helps millions of people every year struggling with bad housing or homelessness through its advice, support and legal services. They also campaign to make sure that, one day, no one will have to turn to them for help. For free and expert advice visit https://england.shelter.org.uk/get_help

Notes to editor:

· The table below shows the local authorities where a family earning wages at the lower quartile - with one adult working full-time and one part-time – would spend the greatest proportion of their net earnings in order to afford an average two bed private rent.

Area (Local Authority)	Region	Annual regional net earnings (based on one FT and one PT wage)	Annual median private rent (2 beds)	% of income spent on private rent	Annual Social Rent (2 beds)	% of income spent on social rent	Rank
Kensington and Chelsea	London	£27,561	£35,100	127%	£6,589	24%	1
City of London	London	£27,561	£30,936	112%	£6,369	23%	2
Westminster	London	£27,561	£30,552	111%	£6,638	24%	3
Camden	London	£27,561	£25,476	92%	£6,262	23%	4
Islington	London	£27,561	£23,400	85%	£6,404	23%	5
Hammersmith and Fulham	London	£27,561	£21,576	78%	£5,882	21%	6
Hackney	London	£27,561	£21,324	77%	£5,794	21%	7
Tower Hamlets	London	£27,561	£20,796	75%	£6,187	22%	8
Wandsworth	London	£27,561	£20,400	74%	£6,154	22%	9
Lambeth	London	£27,561	£19,800	72%	£5,832	21%	10
Southwark	London	£27,561	£19,200	70%	£5,680	21%	11
Richmond upon Thames	London	£27,561	£18,900	69%	£6,842	25%	12
Haringey	London	£27,561	£18,300	66%	£5,750	21%	13
Brent	London	£27,561	£17,988	65%	£6,106	22%	14
Merton	London	£27,561	£17,400	63%	£5,814	21%	15
Newham	London	£27,561	£17,268	63%	£5,454	20%	16
Ealing	London	£27,561	£17,172	62%	£5,586	20%	17
Barnet	London	£27,561	£16,800	61%	£5,801	21%	18
Cambridge	East	£24,717	£15,000	61%	£5,203	20%	19
Epsom and Ewell	South East	£25,411	£15,000	59%	£5,748	22%	20
Guildford	South East	£25,411	£15,000	59%	£6,216	21%	21
Greenwich	London	£27,561	£16,200	59%	£5,435	20%	22
Kingston upon Thames	London	£27,561	£16,200	59%	£5,930	20%	23
Epping Forest	East	£24,717	£14,400	58%	£5,578	22%	24
Hertsmere	East	£24,717	£14,400	58%	£6,451	20%	25
St Albans	East	£24,717	£14,400	58%	£5,671	20%	26
Three Rivers	East	£24,717	£14,400	58%	£6,268	21%	27
Hounslow	London	£27,561	£16,056	58%	£5,814	22%	28
Lewisham	London	£27,561	£15,900	58%	£5,458	19%	29
Elmbridge	South East	£25,411	£14,400	57%	£5,960	21%	30
Oxford	South East	£25,411	£14,400	57%	£5,644	21%	31
Runnymede	South East	£25,411	£14,400	57%	£6,061	20%	32
Windsor and Maidenhead	South East	£25,411	£14,400	57%	£6,381	20%	33
Enfield	London	£27,561	£15,600	57%	£5,595	21%	34
Harrow	London	£27,561	£15,600	57%	£6,092	23%	35
Waltham Forest	London	£27,561	£15,600	57%	£5,586	26%	36
Watford	East	£24,717	£13,800	56%	£6,137	23%	37
Brighton and Hove	South East	£25,411	£14,172	56%	£4,569	25%	38
Redbridge	London	£27,561	£15,240	55%	£5,583	25%	39
Bromley	London	£27,561	£15,000	54%	£5,908	21%	40
Hillingdon	London	£27,561	£15,000	54%	£5,971	23%	41
South Bucks	South East	£25,411	£13,800	54%	£6,360	24%	42
Spelthorne	South East	£25,411	£13,800	54%	£5,425	24%	43
Woking	South East	£25,411	£13,800	54%	£5,831	23%	44
Brentwood	East	£24,717	£13,200	53%	£5,117	19%	45
Mole Valley	South East	£25,411	£13,500	53%	£6,194	21%	46
Barking and Dagenham	London	£27,561	£14,400	52%	£5,342	22%	47
Croydon	London	£27,561	£14,400	52%	£5,731	23%	48
Chiltern	South East	£25,411	£13,200	52%	£4,702	21%	49
Sevenoaks	South East	£25,411	£13,200	52%	£5,775	20%	50
Tandridge	South East	£25,411	£13,200	52%	£5,821	22%	51
Reigate and Banstead	South East	£25,411	£12,900	51%	£6,335	12%	52
Bristol	South West	£23,920	£12,000	50%	£4,663	23%	53
Sutton	London	£27,561	£13,800	50%	£5,873	21%	54
Waverley	South East	£25,411	£12,600	50%	£5,877	18%	55
Dacorum	East	£24,717	£12,000	49%	£5,778	22%	56
Broxbourne	East	£24,717	£11,988	49%	£6,033	17%	57
East Hertfordshire	East	£24,717	£11,940	48%	£6,018	23%	58
Havering	London	£27,561	£13,200	48%	£5,601	24%	59
Bath and North East Somerset	South West	£23,920	£11,400	48%	£5,156	23%	60
Welwyn Hatfield	East	£24,717	£11,700	47%	£5,662	22%	61
Crawley	South East	£25,411	£12,000	47%	£5,497	24%	62
Reading	South East	£25,411	£12,000	47%	£5,549	25%	63
Slough	South East	£25,411	£12,000	47%	£5,970	18%	64
Wokingham	South East	£25,411	£12,000	47%	£6,027	25%	65
Wycombe	South East	£25,411	£11,940	47%	£6,071	21%	66
Basildon	East	£24,717	£11,400	46%	£4,799	23%	67
Harlow	East	£24,717	£11,400	46%	£5,129	24%	68
Surrey Heath	South East	£25,411	£11,700	46%	£6,230	19%	69
Tonbridge and Malling	South East	£25,411	£11,700	46%	£5,442	23%	70
Bexley	London	£27,561	£12,600	46%	£5,486	23%	71
Stevenage	East	£24,717	£11,100	45%	£5,481	25%	72
Bracknell Forest	South East	£25,411	£11,400	45%	£6,157	23%	73
Dartford	South East	£25,411	£11,400	45%	£5,090	22%	74
Hart	South East	£25,411	£11,400	45%	£5,261	22%	75
Horsham	South East	£25,411	£11,400	45%	£5,920	23%	76
Mid Sussex	South East	£25,411	£11,400	45%	£6,569	24%	77
Tunbridge Wells	South East	£25,411	£11,400	45%	£5,021	24%	78
Chelmsford	East	£24,717	£10,800	44%	£5,656	25%	79
Rochford	East	£24,717	£10,800	44%	£5,293	21%	80
Thurrock	East	£24,717	£10,800	44%	£4,857	24%	81
South Oxfordshire	South East	£25,411	£11,100	44%	£5,879	20%	82
South Cambridgeshire	East	£24,717	£10,740	43%	£5,317	21%	83
Warwick	West Midlands	£23,632	£10,200	43%	£5,085	23%	84
Winchester	South East	£25,411	£10,956	43%	£5,717	26%	85
Adur	South East	£25,411	£10,800	43%	£5,204	20%	86
Lewes	South East	£25,411	£10,800	43%	£4,812	23%	87
Rushmoor	South East	£25,411	£10,800	43%	£5,693	22%	88
Vale of White Horse	South East	£25,411	£10,800	43%	£5,243	20%	89
Uttlesford	East	£24,717	£10,500	42%	£2,863	19%	90
Milton Keynes	South East	£25,411	£10,740	42%	£4,804	22%	91
North Hertfordshire	East	£24,717	£10,416	42%	£5,736	21%	92
Bournemouth	South West	£23,920	£9,900	41%	£4,868	19%	93
East Dorset	South West	£23,920	£9,900	41%	£5,041	22%	94
Poole	South West	£23,920	£9,900	41%	£4,967	19%	95
South Gloucestershire	South West	£23,920	£9,900	41%	£5,258	22%	96
Basingstoke and Deane	South East	£25,411	£10,500	41%	£5,563	24%	97
Cherwell	South East	£25,411	£10,500	41%	£4,736	23%	98
Chichester	South East	£25,411	£10,500	41%	£5,698	18%	99
West Berkshire	South East	£25,411	£10,500	41%	£6,051	24%	100
West Oxfordshire	South East	£25,411	£10,500	41%	£5,848	19%	101
Castle Point	East	£24,717	£10,200	41%	£5,148	21%	102
Manchester	North West	£23,368	£9,600	41%	£3,866	19%	103
Canterbury	South East	£25,411	£10,200	40%	£4,686	19%	104
East Hampshire	South East	£25,411	£10,200	40%	£6,042	19%	105
Gravesham	South East	£25,411	£10,200	40%	£4,943	22%	106
Maidstone	South East	£25,411	£10,200	40%	£5,308	20%	107
Wealden	South East	£25,411	£10,200	40%	£4,812	21%	108
Worthing	South East	£25,411	£10,200	40%	£4,918	21%	109
Christchurch	South West	£23,920	£9,600	40%	£5,183	22%	110
Luton	East	£24,717	£9,900	40%	£4,480	22%	111
Maldon	East	£24,717	£9,900	40%	£5,383	22%	112

· Shelter’s analysis makes use of the Annual Survey of Hours and Earnings for regional income levels (for the resident population) and Valuation Office Authority data on median private and social rents for two-bedroom homes cut by Local Authority to assess their affordability.

· Shelter has used earnings at the 25th percentile. An individual that earns an income at the 25th percentile can say they earn more than a quarter of the working population, but less than three quarters of the population.

· Shelter’s analysis has modelled working family earnings by assuming in the household there is one full-time worker and one part-time worker.

· Shelter has used the widely accepted 30% ‘affordability rule’, setting an affordable level of rent as below 30% of a household’s net income. The incomes modelled in this analysis are earings net of income tax and national insurance contributions.

· Shelter also ran a similar analysis with the assumption that a household has only one member working full-time. This resulted in much higher percentages of earnings being taken up by private rent payments.

· £7.9 billion was paid in housing benefit to private landlords in 2017-18 – this has increased by a staggering 41% since the financial crash (2007-08) from £5.6 billion. Source: Department of Work and Pensions (DWP) data on housing benefit.

· The English Housing Survey (EHS) 2016-17 (the most current dataset available) shows that there are 1,537,381 working families living in the private rented sector, which is equal to 26% of all working families in England. Shelter have defined working families as households with at least one working adult (full time or part time) and at least one dependent child in the home.