Private renting unaffordable for working families on low wages in 67% of the country

Posted 09 Jul 2019

In two-thirds of the country, working families on low wages could not afford to privately rent a typical home without turning to housing benefit, Shelter’s new research shows.  

The housing charity analysed average private rents for two-bedroom homes in every local council area in England to assess whether they would be affordable to working families in lower paid jobs - with one adult working full-time and another part-time. There are approximately 1.5 million working families living in privately rented homes.

The findings reveal that – excluding housing benefit – there are 218 council areas where local families earning a low wage would be forced to spend more than 30% of their salary on rent. In 112 of these (35% of areas) this rises to more than 40%.  

Further exposing the depths of England’s ‘rent trap’, Shelter mapped the hotspots where private renting is the least affordable. Kensington and Chelsea topped the list with the average rent in the borough equivalent to 127% of a low earning family’s take-home pay. This is closely followed by Westminster at 111% and Camden where rents swallow 92% of pay.

Additional analysis of rent costs for families with only one full-time worker on a low wage proved even more shocking. In 320 areas (98% of the country), those living off one income would be forced to spend more than 30% of their pay on rent. In 228 of these (70% of areas) this rises to more than 40%.

However, it is not only the capital where the picture is bleak. In Cambridge, a family would have to fork out 61% of their wages on an average rent, versus 57% in Oxford and 50% in Bristol - and that’s before paying for any other essential costs like childcare, food or utility bills.

The charity argues that if the government invested in a new generation of social homes, working families would not need to rely on a faulty housing benefit system to keep a roof over their heads.To demonstrate this, it carried out a comparable analysis of social rents.

In stark contrast to private renting, social rents were found to be affordable for working families on low wages in 100% of the country. The maximum a family with one full and one part-time worker would have to spend on social rent is 26% in Hertsmere, versus just 13% in Hastings.  

With the latest government figures showing almost £8 billion was paid out in housing benefit to private landlords in 2017/18 – Shelter is calling on the next Prime Minister to deliver 3.1 million social homes over twenty years as a more sustainable solution to the housing crisis.

Polly Neate, chief executive of Shelter, said: “Families in lower-paid jobs are having their bank balances bled dry by expensive private rents across huge swathes of the country.

“The steep decline in social housing has left a growing number of families caught in a debilitating ‘rent-trap’. It’s disgraceful that despite working every hour they can, many parents are now forced to rely on housing benefit to keep a roof over their children’s heads.

“It makes no sense to continue haemorrhaging billions of pounds in housing benefit to private landlords, when the government could support families by investing in a sustainable, long-term solution to the housing emergency instead.

“The next Prime Minister, whoever that may be, needs to realise social housing is the best cure to the affordability crisis we face. The delivery of 3.1 million new social homes over the next twenty years is the only way to lift millions out of housing poverty and into a stable home.”

Case study: Lauren, 48, lives with her teenage daughter near Brighton and works as a dance teacher, therapist and wellbeing coach at a university. The high-cost of private renting left her struggling financially for years until she managed to secure a social home at the end of 2018.

Lauren said: “I have counted my blessings every day since I moved into my council bungalow. Renting privately left me paralysed with fear - I couldn’t see a future without benefits and was constantly worried that my landlord would put my rent up. Now it feels like a weight has been lifted off my shoulders.

“Obviously, I am still conscious about my outgoings especially what I spend on any kind of treats – I’ll very rarely go out for a coffee when I can have a nice cup of tea at home. But at least I have a bit of flex around my finances. Our bungalow has brought so much joy and security to myself and my daughter - everyone deserves a home that makes them feel safe.”

Notes to editors:

Shelter helps millions of people every year struggling with bad housing or homelessness through its advice, support and legal services. They also campaign to make sure that, one day, no one will have to turn to them for help. For free and expert advice visit https://england.shelter.org.uk/get_help

  • The table below shows the local authorities where a family earning wages at the lower quartile - with one adult working full-time and one part-time – would spend the greatest proportion of their net earnings in order to afford an average two bed private rent.

Area (Local Authority)RegionAnnual regional net earnings (based on one FT and one PT wage)Annual median private rent% of income spent on private rentAnnual Social Rent% of income spent on social rentRank
(2 beds)(2 beds)
Kensington and ChelseaLondon£27,561£35,100127%£6,58924%1
City of LondonLondon£27,561£30,936112%£6,36923%2
WestminsterLondon£27,561£30,552111%£6,63824%3
CamdenLondon£27,561£25,47692%£6,26223%4
IslingtonLondon£27,561£23,40085%£6,40423%5
Hammersmith and FulhamLondon£27,561£21,57678%£5,88221%6
HackneyLondon£27,561£21,32477%£5,79421%7
Tower HamletsLondon£27,561£20,79675%£6,18722%8
WandsworthLondon£27,561£20,40074%£6,15422%9
LambethLondon£27,561£19,80072%£5,83221%10
SouthwarkLondon£27,561£19,20070%£5,68021%11
Richmond upon ThamesLondon£27,561£18,90069%£6,84225%12
HaringeyLondon£27,561£18,30066%£5,75021%13
BrentLondon£27,561£17,98865%£6,10622%14
MertonLondon£27,561£17,40063%£5,81421%15
NewhamLondon£27,561£17,26863%£5,45420%16
EalingLondon£27,561£17,17262%£5,58620%17
BarnetLondon£27,561£16,80061%£5,80121%18
CambridgeEast£24,717£15,00061%£5,20320%19
Epsom and EwellSouth East£25,411£15,00059%£5,74822%20
GuildfordSouth East£25,411£15,00059%£6,21621%21
GreenwichLondon£27,561£16,20059%£5,43520%22
Kingston upon ThamesLondon£27,561£16,20059%£5,93020%23
Epping ForestEast£24,717£14,40058%£5,57822%24
HertsmereEast£24,717£14,40058%£6,45120%25
St AlbansEast£24,717£14,40058%£5,67120%26
Three RiversEast£24,717£14,40058%£6,26821%27
HounslowLondon£27,561£16,05658%£5,81422%28
LewishamLondon£27,561£15,90058%£5,45819%29
ElmbridgeSouth East£25,411£14,40057%£5,96021%30
OxfordSouth East£25,411£14,40057%£5,64421%31
RunnymedeSouth East£25,411£14,40057%£6,06120%32
Windsor and MaidenheadSouth East£25,411£14,40057%£6,38120%33
EnfieldLondon£27,561£15,60057%£5,59521%34
HarrowLondon£27,561£15,60057%£6,09223%35
Waltham ForestLondon£27,561£15,60057%£5,58626%36
WatfordEast£24,717£13,80056%£6,13723%37
Brighton and HoveSouth East£25,411£14,17256%£4,56925%38
RedbridgeLondon£27,561£15,24055%£5,58325%39
BromleyLondon£27,561£15,00054%£5,90821%40
HillingdonLondon£27,561£15,00054%£5,97123%41
South BucksSouth East£25,411£13,80054%£6,36024%42
SpelthorneSouth East£25,411£13,80054%£5,42524%43
WokingSouth East£25,411£13,80054%£5,83123%44
BrentwoodEast£24,717£13,20053%£5,11719%45
Mole ValleySouth East£25,411£13,50053%£6,19421%46
Barking and DagenhamLondon£27,561£14,40052%£5,34222%47
CroydonLondon£27,561£14,40052%£5,73123%48
ChilternSouth East£25,411£13,20052%£4,70221%49
SevenoaksSouth East£25,411£13,20052%£5,77520%50
TandridgeSouth East£25,411£13,20052%£5,82122%51
Reigate and BansteadSouth East£25,411£12,90051%£6,33512%52
BristolSouth West£23,920£12,00050%£4,66323%53
SuttonLondon£27,561£13,80050%£5,87321%54
WaverleySouth East£25,411£12,60050%£5,87718%55
DacorumEast£24,717£12,00049%£5,77822%56
BroxbourneEast£24,717£11,98849%£6,03317%57
East HertfordshireEast£24,717£11,94048%£6,01823%58
HaveringLondon£27,561£13,20048%£5,60124%59
Bath and North East SomersetSouth West£23,920£11,40048%£5,15623%60
Welwyn HatfieldEast£24,717£11,70047%£5,66222%61
CrawleySouth East£25,411£12,00047%£5,49724%62
ReadingSouth East£25,411£12,00047%£5,54925%63
SloughSouth East£25,411£12,00047%£5,97018%64
WokinghamSouth East£25,411£12,00047%£6,02725%65
WycombeSouth East£25,411£11,94047%£6,07121%66
BasildonEast£24,717£11,40046%£4,79923%67
HarlowEast£24,717£11,40046%£5,12924%68
Surrey HeathSouth East£25,411£11,70046%£6,23019%69
Tonbridge and MallingSouth East£25,411£11,70046%£5,44223%70
BexleyLondon£27,561£12,60046%£5,48623%71
StevenageEast£24,717£11,10045%£5,48125%72
Bracknell ForestSouth East£25,411£11,40045%£6,15723%73
DartfordSouth East£25,411£11,40045%£5,09022%74
HartSouth East£25,411£11,40045%£5,26122%75
HorshamSouth East£25,411£11,40045%£5,92023%76
Mid SussexSouth East£25,411£11,40045%£6,56924%77
Tunbridge WellsSouth East£25,411£11,40045%£5,02124%78
ChelmsfordEast£24,717£10,80044%£5,65625%79
RochfordEast£24,717£10,80044%£5,29321%80
ThurrockEast£24,717£10,80044%£4,85724%81
South OxfordshireSouth East£25,411£11,10044%£5,87920%82
South CambridgeshireEast£24,717£10,74043%£5,31721%83
WarwickWest Midlands£23,632£10,20043%£5,08523%84
WinchesterSouth East£25,411£10,95643%£5,71726%85
AdurSouth East£25,411£10,80043%£5,20420%86
LewesSouth East£25,411£10,80043%£4,81223%87
RushmoorSouth East£25,411£10,80043%£5,69322%88
Vale of White HorseSouth East£25,411£10,80043%£5,24320%89
UttlesfordEast£24,717£10,50042%£2,86319%90
Milton KeynesSouth East£25,411£10,74042%£4,80422%91
North HertfordshireEast£24,717£10,41642%£5,73621%92
BournemouthSouth West£23,920£9,90041%£4,86819%93
East DorsetSouth West£23,920£9,90041%£5,04122%94
PooleSouth West£23,920£9,90041%£4,96719%95
South GloucestershireSouth West£23,920£9,90041%£5,25822%96
Basingstoke and DeaneSouth East£25,411£10,50041%£5,56324%97
CherwellSouth East£25,411£10,50041%£4,73623%98
ChichesterSouth East£25,411£10,50041%£5,69818%99
West BerkshireSouth East£25,411£10,50041%£6,05124%100
West OxfordshireSouth East£25,411£10,50041%£5,84819%101
Castle PointEast£24,717£10,20041%£5,14821%102
ManchesterNorth West£23,368£9,60041%£3,86619%103
CanterburySouth East£25,411£10,20040%£4,68619%104
East HampshireSouth East£25,411£10,20040%£6,04219%105
GraveshamSouth East£25,411£10,20040%£4,94322%106
MaidstoneSouth East£25,411£10,20040%£5,30820%107
WealdenSouth East£25,411£10,20040%£4,81221%108
WorthingSouth East£25,411£10,20040%£4,91821%109
ChristchurchSouth West£23,920£9,60040%£5,18322%110
LutonEast£24,717£9,90040%£4,48022%111
MaldonEast£24,717£9,90040%£5,38322%112

  • Shelter’s analysis makes use of the Annual Survey of Hours and Earnings for regional income levels (for the resident population) and Valuation Office Authority data on median private and social rents for two-bedroom homes cut by Local Authority to assess their affordability.

  • Shelter has used earnings at the 25th percentile. An individual that earns an income at the 25th percentile can say they earn more than a quarter of the working population, but less than three quarters of the population.

  • Shelter’s analysis has modelled working family earnings by assuming in the household there is one full-time worker and one part-time worker.

  • Shelter has used the widely accepted 30% ‘affordability rule’, setting an affordable level of rent as below 30% of a household’s net income. The incomes modelled in this analysis are earnings net of income tax and national insurance contributions.

  • Shelter also ran a similar analysis with the assumption that a household has only one member working full-time. This resulted in much higher percentages of earnings being taken up by private rent payments.

  • £7.9 billion was paid in housing benefit to private landlords in 2017-18 – this has increased by a staggering 41% since the financial crash (2007-08) from £5.6 billion. Source: Department of Work and Pensions (DWP) data on housing benefit.

  • The English Housing Survey (EHS) 2016-17 (the most current dataset available) shows that there are 1,537,381 working families living in the private rented sector, which is equal to 26% of all working families in England. Shelter have defined working families as households with at least one working adult (full time or part time) and at least one dependent child in the home.