Private renters are facing an increase in housing costs, with rental price growth at its highest rate in the UK since records began in 2016.
About a quarter (26%) of all renters (both private and social) surveyed between 7th and 18th December reported that their rent payments had gone up in the last six months, according to data from the government's Opinions and Lifestyle Survey. It found that 7% of renters reported to be behind on rent payments during that week.
Private rental prices paid by tenants in the UK rose by 4% in the 12 months to November 2022, up from 3.8% in the 12 months to October, according to data from the Index of Private Housing Rental Prices.
Renters spend almost a quarter of their weekly expenditure on rent compared with 16% by those with a mortgage, says the Office of National Statistics which reveals that in the year to March 2021, UK renters spent �106.50 each week on rent once housing benefit, rebates and other allowances received were accounted for, equivalent to 24% of their weekly expenditure. Meanwhile, mortgage holders spent a total of �140.80 each week on mortgage repayments, equivalent to 16% of their weekly expenditure.
However, many landlords on fixed-rate deals are also due to be hit with rising costs when their current deal expires. The ONS says that more than 1.4 million households would be renewing their fixed-rate mortgage this year, with 57% of them currently paying an interest rate of less than 2%. This renewal peak will come between April and June when 371,000 deals expire.
Should the interest rate on a �100,000 capital and repayment mortgage, borrowed over 25 years, increase from 2% to 6%, then the monthly repayment would jump by �220; the same increase on a �300,000 mortgage would see monthly repayments rise by �661.
In its fiscal forecast, published in November, the OBR predicted that the Bank Rate would rise from 1.6% in Quarter 3 2022 to 4.8% in Quarter 3 2023 and 4.5% in Quarter 3 2024.