Report analyses cost of private sector rent in Brighton and Hove

Renting in the private sector in Brighton and Hove can cost up to two thirds of a couple’s monthly income, according to a think-tank’s analysis.

The report highlights the financial struggle for low to middle income families and points out that the rising cost of deposits has put mortgages out of reach for many.

It also flags up the shortage of social housing such as council homes and those let by housing associations.

The Resolution Foundation said: “Even a very modest rented home is beyond the reach of low income households in 33 per cent of all local authority areas.”

The think-tank analysed the cost of living in every local authority area for a couple earning an average income of £22,000 a year.

Its analysis suggested that a couple without children in a typical one-bedroom property owned by a private landlord would need to spend 36 per cent to 54 per cent of their income on rent.

They would need to spend between 39 per cent and 58 per cent of their income on a mortgage.

A couple with one child in a two-bedroom property would need to spend 39 per cent to 58 per cent of their income on rent and 44 per cent to 66 per cent on a mortgage.

A couple with two children in a three-bedroom property would need to spend 44 per cent to 66 per cent of their income on rent and 49 per cent to 72 per cent on a mortgage.

Off-limits

The think-tank said: “One third of Britain is effectively off-limits to lower-income working families looking to rent a home privately because they can no longer afford a property in those parts of the country.

The study, Home Truths, also suggested that the demand for private rentals, coupled with low interest rates, meant that rents were now more expensive than monthly mortgage repayments in almost half of the country.

It said: “Private renting is increasingly the only option for millions of families who are not wealthy enough to afford a buyer’s deposit nor vulnerable enough to qualify for social housing.

“Most low to middle income households under the age of 35 (52 per cent) are now private renters.”

The report also said: “Moving to areas where housing is very affordable may not be sensible for many low to middle income families whose finances are squeezed by high housing costs because there may not be adequate employment and other opportunities in these inexpensive areas.

“Similarly, it highlights the importance for local authorities to consider the relationship between housing and other economic factors when planning where to locate new housing supply.”

In its conclusion the Resolution Foundation said: “The analysis presented in this report highlights the need for urgent action to address the affordability of housing for low to middle income Britain.

“1.3 million low to middle income households are spending more than 35 per cent of their disposable income on housing, crowding out other essentials.

Struggling

“The problem is particularly acute for low and very low income families but it is striking how many median income families are also struggling with the costs of housing.

“Those renting privately now face some of the sharpest affordability problems but have few other options.

“Home ownership is out of reach for the vast majority of the group because few have the savings needed for a deposit and social housing is predominantly targeted at more vulnerable out of work households.

“With household incomes for the group expected to stagnate until 2020, affordability will continue to be a pressing problem for the decade ahead and while the crisis in London is well documented, there are affordability black spots in almost all regions of the country.

“The current affordability crisis is the inevitable outcome of the year-on-year failure to build enough homes to keep up with demand.

“But improving affordability is not a simple numbers game. It is not as straightforward as closing the gap between housing starts and household formation.

“We need to build more homes in the right locations and of the right type and at the right price to meet the needs of households who currently have few options.

“Local authorities must play an active role in planning for the overall needs of their communities and connecting up planning policy, housing affordability and the wider economic needs of their local residents.”