Number of young people spending over 30% of income on rent hits five-year high

The number of young people under 30-years-old spending more than 30 per cent of their salary on rent has reached a five-year high, new data shows.

It comes as the cost of living crisis is plunging Britain into its worst standard of living crisis in decades with energy bills still set to soar again this autumn.

The analysis by Dataloft, shared with the BBC, aggregates records from 150,000 tenants collected by major tenant referencing companies for the year until the end of June 2022.

Many housing organisations say this proportion of spending on rent is “unaffordable.”

Generation Rent director Alicia Kennedy warned that the government needs to intervene now to support renters and avoid pushing young people into crisis amid rising costs.

“Rents over the last year have seen the highest jump since records began,” Ms Kennedy told the Today programme. “How are private renters, especially those on low incomes, going to keep a roof over their heads as the cost of living crisis continues? How are you going to pay these sky high rents, the government needs to step in now. We want the government to temporarily freeze rents and pause evictions.

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“The race for space in the rental market means it’s a bidding war, if you’re economically secure you'll win that war but if you’re not you won’t,” Ms Kennedy added.

While London has the highest rents, affordability has worsened in towns such as Rotherham and Bolton for young people since the pandemic.

The data suggests under-30s spend more of their earnings on rent than other working age groups.

Sarah Wilkinson who is privately renting in Salford said young people have no chance of securing a mortgage because of the price of renting.

“You’re choosing between rent or the long term. We can’t save for a mortgage because rent is so high,” Ms Wilkinson said.

“Your whole salary is just going toward having a roof over your head,” she added.

David Votta, vice president of Property Mark, a membership group for estate agents, said the rise in rental prices is due to a lack of housing

“It’s supply and demand,” Mr Votta told the Today programme. “What you have is a massive lack of housing and because there’s such a lack of housing the demand for it is so great

“No ones listening to the experts on the frontline. Bring back mortgage interest relief and let’s encourage more landlords into the private rental sector - the prices will level off.”

The data excludes income outliers, including those earning less than £10,000 because they are likely to be supported by other sources of income or by guarantors.

Across all the age groups, Dataloft has data for over 400,000 records for the year to the end of June and estimates it covers 40 per cent of the rental market in England, Scotland and Wales.