A survey found that around half as many mortgage holders were in a similar financial position (17%). Bad news for landlords who bore the brunt through the pandemic through prolonged periods of unpaid rent, while their tenants couldn’t be evicted due to the eviction ban.
According to the data, 19% of private renters say their finances are in good shape, compared to 50% of those who own their own home outright, and 35% of those with a mortgage.
Tenants typically spend more on rent than owners spend on their mortgage, as almost 30% of their income goes towards paying the rent, compared to less than 20% for mortgage holders. The survey found that 48% of renters save less than £50 a month, compared to 26% of owners.
Sarah Coles, personal finance analyst, Hargreaves Lansdown, comments on the findings: “Generation rent is being wrung dry, and the spending squeeze is making it worse.
“Only one in five say their finances are in good shape and more than one in three couldn’t last a month on their savings.
“Their finances are on a knife-edge, so even the smallest surprise runs the risk of causing financial chaos. Fortunately, there are ways to build your resilience, even when you’re renting.
“You might think this is a problem for young renters and is just a function of starting out in life with a relatively low income and higher outgoings before you’ve had the chance to build up any savings.
“However, the savings gap between renters and owners actually grows as we get older, and is highest among those aged 65 and over. If you’re part of Generation Rent, you need to improve your resilience right now, because it’s not automatically going to get easier over time.”
