Private renters fifty per cent more likely to have fallen behind with housing costs than mortgagors

One-in-eight (13 per cent) private renters have fallen behind with their housing costs since the coronavirus crisis started, compared to just one-in-twelve (8 per cent) mortgaged home owners, highlighting how the pandemic has exacerbated Britain’s housing divide, according to new Resolution Foundation research published today (Saturday).

The report, based on a YouGov survey of 6,005 UK adults aged 18-65 and supported by the Health Foundation, provides a timely take on the impact of the crisis so far across different housing tenures, including how people have coped with meeting their housing costs, what support they’ve been able to access, and how housing costs have affected their wider spending patterns.

The report notes that one-in-five (20 per cent) private renters have been furloughed or lost their job since the crisis began, compared to around one-in-seven (14 per cent) mortgaged home owners. However, home owners are more likely to have had their hours reduced and less pay (15 per cent, compared to 12 per cent).

An even bigger divide opens up when it comes to meeting their housing costs, says the report. Around one-in-eight private renters (13 per cent) report falling behind on their housing costs, compared to just one-in-twelve (8 per cent) home owners with a mortgage.

The Foundation says private renters’ bigger struggle to meet their housing costs in part reflects the fact that they face higher costs in the first place – their average pre-crisis housing costs were 32 per cent of their family’s income, compared to 11 per cent among mortgaged homeowners. The survey shows they also have less of a financial buffer to fall back on, with almost one-in-four (23 per cent) private renters having no savings in the run-up to the crisis, compared to one-in-eight home owners (11 per cent).

While renters receive more generous benefit support than mortgagors, home owners with a mortgage have been more successful in accessing support outside of the social security system to cope with the crisis.

One-in-seven (13 per cent) have applied for a mortgage holiday, the vast majority of which have been accepted. In contrast, just one-in-ten private renters have asked for a rent reduction from their landlord (10 per cent), and just half of those requests were successful (50 per cent).

The Foundation notes that this housing cost squeeze has forced many people living in private rented accommodation to cut back on basic spending or, in the case of young people, to move house.

One-in-four (25 per cent) private renters have reduced other spending to cope with meeting their housing costs. Of these renters, half (54 per cent) report currently being unable to afford basics such as fresh fruit and veg, or to save £10 or more a month.

Around one-in-ten (10 per cent) private renters have moved house. Around half (47 per cent) of those who have moved house are 18-24 year olds, while three in five (62 per cent) have moved in with their parents.

Lindsay Judge, Principal Research and Policy Analysts at the Resolution Foundation, said:

“Britain already had a huge housing divide before coronavirus struck, and the current economic crisis has only widened that gap.

“People living in private rented accommodation have found it harder to meet their housing costs than homeowners in recent months, and harder to negotiate reductions in those costs. The result is that a quarter are cutting back on other spending, in many cases on essentials, to cover their rent during this crisis.

“Policy makers need to recognise that, while the 1990s recession was infamously most severe for the UK’s home owners, this recession is biting hardest for renters.”

Notes to Editors

  • Figures on the share of income spent on housing are from Resolution Foundation’s Housing Dashboard
  • All other figures are from YouGov plc. Total sample size was 6,005 working age adults. Fieldwork was undertaken during 6-11 May 2020. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+) according to age, gender, and region.
  • While our survey cannot be weighted to produce a nationally representative tenure picture, the sample does not differ significantly with from a representative one. According to the ONS Labour Force Survey, in 2019, 37 per cent of adults aged 18-65 lived in home they owned with a mortgage, 12 per cent were social renters and 20 per cent rented privately (compared to 36 per cent, 10 per cent and 20 per cent of our survey’s sample).
  • The figures relating to proportion of those furloughed, losing their jobs or on reduced hours are not reflective of YouGov statistics and have been analysed independently by the Resolution Foundation.
  • The survey was designed and commissioned by the Resolution Foundation, in partnership with the Health Foundation. The views expressed are those of the Resolution Foundation and not necessarily the Health Foundation.