Private Tenants pay three times as much for same space - claim

A think tank claims that when it comes to space within a home, private rental sector tenants pay three times as much as mortgage-borrowers. 

Using 2021-22 figures - the latest available - the Resolution Foundation says that “square metre by square metre, they are paying on average more than three-times as much as mortgagors for their housing (around £11 per square metre for private renters in 2021-22, compared to just over £3 for mortgagors).”

However, this of course excludes the mortgagors’ principal payments for the property, and instead simply compares rent with mortgage payments. 

The foundation continues by saying that in 2022-23, the average family renting in the private sector spent around a third of their income on housing costs, compared to the average mortgagor who spent closer to a tenth of their income, despite the latter facing far higher interest rates than has been the norm since the financial crisis.

The foundation adds that “doing nothing to help at least low-income private renters with housing affordability is likely to be increasingly untenable over the next parliament” because of the high number of households in temporary accommodation - nearly 113,000 by the end of 2023. 

And it says that although the last Conservative government re-linked Local Housing to the statistically-significant 30th percentile of local rents in April this year, this was a one-off move. The foundation says that this means “if no changes are made, LHA will become increasingly disconnected from local rents once again.”

It adds: “Repegging housing support permanently to trends in local rents is far from cost-free, but the pressure will build on the next government to do just this as rents rise rapidly in the coming years.”

The Resolution Foundation describes itself as an independent think tank: its chief executive resigned this month to become a Labour parliamentary candidate.

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