The research found that of the 69% of adults that either have a mortgage or pay rent across the United Kingdom, spend approximately 29% of their take-home pay on housing costs each month. For a third responsible for housing costs in their home the figure was more forgiving and ran at 20% or less.
As you would expect, it was the young who were the most likely to see less of their hard earned cash left after forking out for their housing costs. The data revealed that those aged between 18-24 were spending the most on either rent costs or a mortgage, with 18% struggling to see 50% of their wages left. Amongst people aged 25-34 the proportion who spend over half their income on housing is 16%.
Surprisingly, the proportion of people in London paying over 50% of their income for housing is 14%, which is not dramatically higher than the average across the UK. However, across the South East, 1 in 6 (17%) are spending over half their take home on housing.
Commenting on the report, Ian Williams, spokesman for DAC, said:
“For most people, their rent or mortgage payment is their single biggest monthly commitment. Whilst paying over half of your income on housing may be sustainable for some, it certainly leaves very little to cover other essential bills or any other credit commitments. Homebuyers whose housing costs account for a high proportion of their income may be particularly vulnerable to changes in interest rates, if they haven’t fixed their mortgage.”