First-time buyers who purchase a house this year will have already spent £52,900 on rent – or the deposit on a £1m house
Those who are about to step on to the property ladder this year will have already cashed out £52,900 on rent, according to new research – more than you would spend on a five per cent deposit on a £1m house.
And the figures published by the Association of Residential Lettings Agents (Arla) show that there are wide regional differences, with rents rising faster in London and the south east.
Those buying a property for the first time this year in the north east will have spent £31,300 on rent – the lowest amount in England. Meanwhile, in London the average amount spent is more than double that, at £68,300.
Put another way, the amount a Londoner has spent on rent when they buy a home is equal to over 13 per cent of the average property price in the capital, which has risen to just over £500,000.
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The south east is the only region other than London where the total lifetime rent spent is above the English average, where the total rent expenditure equates to £55,900.
"Rents are becoming alarmingly unaffordable due to the lack of available housing," said David Cox, managing director of Arla. "The north-south divide we're currently seeing in the UK is a clear illustration of this. The London rental market is competitive, with far more prospective tenants looking for properties than actual houses available."
"This is pushing up rents in the capital, which will continue to put pressure on surrounding areas, including the south east of England, as Londoners relocate to avoid high rent costs," he added.
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The data, complied with the Centre for Economics and Business Research, also found that the situation is becoming increasingly dire, the cost rising to £64,400 for those starting to rent now.
In fact, Arla found that rent will account for 16.4 per cent of total lifetime earnings for today's first-time buyers, on average. A fifth of those renting in the UK don't even expect to ever be able to afford to buy a home.
"There is a desperate need for more housing supply and better overall market accessibility for affordable homes in particular, in places where people want to live and work. The deluge of applications for the London Help to Buy scheme demonstrates just how many people are struggling to get a foothold on the housing ladder," said Jeremy Leaf, a former Royal Institute of Chartered Surveyors chariman, commenting on the findings.
"If landlords do exit the buy-to-let sector en masse post-April as higher stamp duty and less beneficial tax breaks come into force, rents will only rise because there will be fewer properties for tenants to choose from. first-time buyers may find their already steep rent bill increases further unless the lack of supply is addressed," he added.
Earlier this month separate research found that house prices are rising at twice the pace of earnings, with growth fastest in the south east and London.