Private renters in UK pay double the European average

Despite the growing number of private renters in England and the UK, private renting remains comparably unattractive to many and often viewed as the ‘tenure of last resort’.

Gerald Koessl is a Research Officer at the National Housing Federation

Gerald Koessl is a Research Officer at the National Housing Federation

23 June 2015

While there are certainly cultural and social factors that have made home-ownership the ‘ideal tenure’, there are also economic and regulatory issues that have contributed to the perception of the private rented sector (PRS) in the UK.

The newspapers are full of stories about the high cost and insecure conditions many private renters are facing, in particular in London. But renting from a private landlord does not by definition mean high rents and insecure tenancies. However, the UK performs poorly compared to our European neighbours.

In fact, private renters in the UK pay the highest price for housing in the entire European Union. With an average monthly rent of 902 Euros per month (the equivalent of around £730), private renters in the UK pay almost double the amount of the European average, which is 481 Euros. Even when compared to other Western European countries with similar income levels, the PRS in the UK remains expensive. For example, private rents in the UK are around 50% higher than in Germany (600 Euros) or the Netherlands (625 Euros), both countries with a large share of privately rented households.

High rent levels mean the average household in the UK pays a higher proportion of their income on rent than elsewhere. On average, private rented households in the UK spend almost 40% of their income on paying their rent, compared to a European average of 28%, making it the highest proportion across all EU member states. In Germany, the country with the highest proportion of private renters in the EU, households spend an average of 25%, which is the lowest rate among West European EU member states. Private renting is comparably more affordable in some Accession countries, such as Slovakia, Latvia or Slovenia, where an average household only needs to spend between 13% and 17% of their income on paying the rent.

This puts a burden on household budgets. As a smaller proportion of households are buying a home and more are privately renting, the cost of renting is a concern. Individuals and families have to spend the equivalent of around 23 minutes out of every hour worked to pay for their rent, while it is around 17 minutes of every hour worked across the whole of Europe.

Increasing the number of homes of all tenures will have beneficial impacts on cost across every tenure. Privately renting has many benefits for a variety of people, but burdening them with high costs is not a desirable outcome.

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