How are people affording housing

[MattBerningerstrophywife]

I live in a fairly low cost part of Scotland.
but recently I’ve been seeing rent for 2/3 bed flats between £800 to £1500 per month.

when the average salary is around £30k: how are people affording this?

There need to be tighter legal controls on buying homes and leaving them empty. If homes are not being sold, the prices need to come down. But the UK has a low vacancy rate by international standards. There is no way out of this mess that does not involve a ton of building too, even if other measures need to be taken as well - the population has increased, people are living longer and there are larger numbers of households due to more singles, later marriage and so on.

The UK has also been failing to rebuild its old housing stock, which is why the UK has Europe's oldest AND heat-leakiest housing stock, AND the least floor-space per person; things like 19th century terraces are cramped and impossible to insulate properly, so people are cold in the winter and hot in the summer. Most housing only has a lifespan of about 150-200 years, and a lot of Victorian terraced housing was thrown up quickly in the expectation it would be demolished within a generation; our 19th century forbears would be surprised if they could time travel to 2024 and discover that modern people are still living in these things. Given that a lot of this housing stock will need to be demolished in the near future anyway, it might be a good idea to replace a lot of it with taller buildings (a mixture of three- and four-storey terraces and mid-rise apartment blocks would probably be a suitable mix for these kinds of areas).

Millions of people are on low wages (and someone has to do those important jobs). Plus there's disabled people unable to work, and full-time carers. They will never be able to afford buy regardless of how many non council homes are built.

The point of my post was "Let's do more private sector building as well," not "let's not bother with council housing." A certain % of the population will never be able to manage private renting/home ownership for various reasons, which is why council housing is essential. Yes, we should build more of that as well. We should be doing all the things, because the UK needs about 4.5 million more homes in total. "Building more" is not the only thing that needs to be done, but there is no solution that does not involve a ton of building of various kinds.

They don't afford it they literally struggle to live in general my home is £800 PCM in the Midlands not Birmingham smaller area every month is a struggle

In OP’s example the answer will be that most people can’t afford it but there are so many people after every property that it only takes one renter who can afford it and that’s the new level of the rent. Couples with dual income can afford it. Single parents and students can’t.

If you do the maths on the purchase price and current interest rates the landlord may not even be making money on it anyway.

I am in a small 3 bed in outer London with THREE adult DC all still at home. All earning but no realistic prospect of moving out without coupling up or family help.

I'm actually facing being homeless for this reason - I've always worked and always private rented. Have been forced to move and I can't find anywhere within my budget.

With great difficulty. I am single, 3 x kids, only one under 18 now (16). Its taken some time to build my career up, due to 3 kids and my ex going overseas and building up his career. And I live in the south east. I am renting, £1350 for a 2 bed top floor flat. Its actually ok living here and i’m fairly happy but of course I want to buy. I earn 67k so not a bad wage, but its just me. I can afford 325k purchase price max. Which gets me a flat here. So I am waiting to move back north where I can buy a house for less than that. Probably won’t go as high as 325k as I need a shorter mortgage. If I was in a couple, it would be much easier. But i’m not.

So hard for young people now. My ex is going to help out the 2 DC we have together with a deposit from his share of his parents house when his mum passes away. Plus both very academic and DS already has a graduate job lined up a year before graduation. My eldest though is a low ish earner and will need my help, which won’t be easy. He lives in a cheaper area at least

Yes you can as that’s what I earn (single income household) and I can comfortably pay my £1350 rent and save some money too. I guess it depends on your other outgoings though. My kids are older so although I give money for DC at uni, I don’t have any childcare to pay these days. That is what could cripple families who have high rent too

If it was 2/3 beds they would generally be a couple so the £30k would be more likely £50k-£60k.

It’s not only the issue with the monthly cost of renting but also the affordability checks. Agents are not allowing viewings unless you earn a certain amount. I can’t see how people are managing if they are not already on the housing ladder or if they are renting and need to move properties

Totally agreeEvie:- if I leave my current place, I won't pass affordability checks for anywhere else. I have been single by choice since my divorce ended - realistically, my only option would be to get into a relationship and accelerate it to a cohabiting point. I do not want a relationship and I would feel like a socially acceptable prostitute, but that's the reality of renting.

Have you missed the news about cost of living, recession/inflation and sharp rise in mortgages rates the last couple of years?

You know, the news everyday about mortgage rates increasing so that when people's fixed rate mortgage ends, their repayments would be double? Therefore impacting homeowners and renters.......

Same goes for OP, if you're only noticing the huge rise now, then it must have been a nice rock you were living under.

The problem is cost of living and cost of housing has been based on households with two incomes. So someone living alone is stuffed if they earn under about £60k. It means single people and single parents are at a significant disadvantage.

New homes have been built in my area but none are under £300k and these are marketed as affordable. They aren’t for most youngsters in my area who are trying to start out and have their own families.
They need to build studios or 1 beds that are based on one min wage so that youngsters can get a foot on the property ladder and start working up it. Shared ownership schemes sound like a poor deal with rent and service charges as well as a mortgage to pay.

One of the biggest changes in UK society has been the increase in single person and single parent households. Apart from a minority of very high earners, it pretty much takes two low or average incomes to cover costs nowadays, at least until the mortgage is paid off! Renters never get that break.

Most people can't afford the insanely high rents now. A 2 bed in my area is around 1600pcm. I could afford that but on 58k salary my takehome pay is 3300pcm and so rent would still be pushing towards half of my monthly take home which isn't ideal. On a more average salary I'd be truly screwed. The fact that so many people need UC to top up rent just shows how unaffordable it is. Plus it's completely insane that tax payers money goes to prop up the housing sector.

Waiting patiently for all the posters who usually chip in with something like "oh well everyone should get jobs earning 120k like me and if you didn't do that already it's your fault for not planning properly and why does anyone have children if they earn any less" but also want to be able to have people to clean the streets/their houses/staff the local GP surgery/deliver the mail etc

High interest rates for example my mortgage went from £490 to £750 I waited till the last minute to swap at one point it was about £850. So if you a landlord with buy to let and you remortgage you will need to raise the rent so the mortgage payment is covered, cover fees/insurance etc and if you do it as your business I assume make a profit

And people who aren't in a couple? When even one beds are taking 75% of someone's wage it is hard.

People can’t afford it. They need to partner up so double income, rent out a bedroom, go into debt, scrimp and save

No, generally it’s a mix of: mortgages have increased and LL passing costs to tenants; changes in legislation (I speak from south England) which are seeing LL costs / responsibilities increase (which should have always been case but hey hi that’s English law). We are seeing in London / south England changes which will cause ripples in private rental market - second home tax changes, BTL changes, increased renters rights, non dom sttaus / tax changes - which all have different outcomes incl - BTL LL selling up, leaving UK, reducing housing stock available for renters plus more people staying out who own, limiting stock for sales, FTB moving into owned properties. We will see next decade issues increasing before gets better (increase of new homes/ refurb homes). England has been totally screwed for housing since late 70s and we are now seeing the start of reversals of this but will take time to undo/ change 40 + years of sheer lunacy.

I have a housing association property so my rent is lower.

I earn £29k and am single, I could probably afford a private rent in my area (2 bedroom flats go for around £750) but I wouldn't have much spare after other bills.

In my area there are vast amounts of new builds unsold because they are wildly unaffordable for anybody but the highest earners.

I'm sure they will sell eventually but some have been on the market for more than a year. The market is absolutely flooded with them for miles around.

I think you are missing the point that in many of those countries there is rent control and longer term tenancies. Social housing isn’t the only model but you need to manage the market, and we don’t.

There's a big new development near me and the cheapest starter home is £300k. This is a fairly low wage area and no way someone on 1 average income could afford it.

But the government has also made it really unattractive for landlords so that has a knock-on impact on the rental market.

This is only part of the story for tenants. It was all the rules and on costs placed on landlords.

1. Legislaton that landlords couldn’t deduct the full interest payment amount from profit if they own the houses as private citizens rather than as part of a company. Companies owning properties are allowed to deduct the interest payments from profit. I note, there are Tory ministers and / or their families, who own housing companies rather than houses as individuals.
2. Legislation that tenants no longer have to pay for credit checks and part of the rental set up process.
3. Legislation to make properties safe and warm, which whilst a basic right costs money and need factoring in. Gas safety checks annually have been around for years, more recently electrical safety checks, legionnaires check, EPC certificate, smoke and CO2 alarms, tenancy deposit schemes requiring professional inventories to reclaim damage costs, massive on costs and barriers to evict non paying tenants. None of these things were required in the past and they all cost money. In the past for example a couple of heavies would chuck a non paying tenant’s stuff on the lawn. Now it can cost a landlord tens of thousands.
4. Additonal stamp duty on a second purchase, which has just risen again.
5. Rises in capital gains tax claiming more and more of the profit from sale, which started over a decade ago and has just risen again in the recent budget.
6. And this is a big one as this is the reason house prices rose sharply around a decade ago. Oligarchs, mainly Russian buying great swathes of London and using these purchases as a way of laundering money. The Conservative government put a stop to this after a few years but way way too late and many many flats in prime locations stand empty.

Twenty, thirty years ago, landlords were welcomed by the government and seen as much needed. Tenants didn’t stay long in properties and landlords performed a service often as a stepping stone to purchase. All was well. Now landlords are portrayed as vultures as successive governments cover up their failures eg Margaret Thatcher selling off housing stock, ring fencing the money, which subsequently was spent. Then help to buy being reintroduced, both of which were a massive mistake.

Rental prices were based on a different time and the conservative government screwed the market and labour has compounded it. Unfortunately tenants are collateral damage.

The UK used to build millions of social homes, but stopped – instead, we spent decades getting rid of them. The inequality and poverty created by that decision means we're all living worse lives, but at least it shifted billions to landlords.

A while ago there was a scheme mooted that if you could prove you'd paid your rent reliably over a set period, banks could consider you for a mortgage even if the overall house price was many times the salary available, so long as the projected monthly cost on long term fixes was within a margin. The old way of calculating affordability needs overhauling. People are stuck paying double in rent what they might for a mortgage on the same house. Those 300k new builds over a long mortgage term would probably be affordable monthly to month if this approach was taken.

I'm always amazed when the houses near to me get sold to landlords and the rent is triple my mortgage on the same house.