‘This is just ruinous’: the Britons unable to afford their homes

The cost of living crisis, spiralling mortgage rates and soaring rents have exacerbated property shortages in Britain to the extent that housing is now unaffordable in vast parts of the country for the typical earner.

With the average British home now costing about nine times the mid-range income and average monthly rents in the capital and outside London having hit record levels in the first quarter of the year, millions of Britons are living in areas where they can afford neither to buy a mid-priced property, nor to rent a home without spending a disproportionate part of their income, a Guardian analysis has revealed.

The leading ratings agency Moody’s has predicted that UK house prices will fall 10% over the next two years, owing to stubbornly high inflation and the recent spike in mortgage rates.

One of those feeling the pinch is Clara, a 42-year-old secondary school teacher and mother of two teenagers, who rents a three-bedroom house in Hemel Hempstead for £1,450 a month.

“The rent makes up 40% of mine and my partner’s joint take-home income,” she says, which puts it above the 30% threshold that the Affordable Housing Commission defines as affordable. “Our rent just rose again a month ago, because the landlord’s mortgage payments increased.

“Rents here have always been quite high, but have gone up a lot in the area over the last 10 years. There is a very large and growing group of people here who earn too much to access any form of housing benefit, but not enough to pay rent and the bills.”

In order to stay close to their children’s schools, the couple have had to use credit cards and loans to keep on top of bills. “We’ve racked up about £13k of debt over time, just to pay our basic living costs, like petrol, food and rent,” Clara says. “We both work full-time, cannot save. We felt that we had no choice.”

Clara is one of dozens of people who responded when the Guardian asked readers in Britain whether they could afford their housing costs.

Tony Mono, 63, who had to give up work as a graphic designer two years ago due to health issues, moved to St Leonards-on-Sea, East Sussex, from Wolverhampton in 1995.

“Until about four years ago, it was more or less affordable to live here,” he says. “Now, I could become homeless.”

Mono, who has been renting an unfurnished one-bedroom apartment from a private landlord since 2009 for £495 a month, now faces eviction as the owner wants to sell. “I’ve been looking at flats since June last year, but it’s been virtually impossible to even get a viewing, even after I offered six months’ rent upfront,” he says.

“I’ve been told by estate agents I need to earn 30 times the monthly rent, which is ridiculous. Not many locals here will be on that kind of money, but you need £27,000 now to rent in one of the country’s poorest coastal towns.”

Over the past 10 years, Mono says, there has been a steady influx of home-buyers from London, and much of the available rental property has been turned into holiday lets. The maximum rent he could pay, he says, would be £750, which would be 67% of his monthly universal credit award of £1,118.

“I’ve always been able to budget on a low income, but now my situation is unsustainable.”

While spiralling rents make life a struggle for millions of people in Britain, homeowners are grappling with rising costs, too, in some cases too much to bear.

When Barbara*, 42, a single mother who works full time as a marketer in the legal sector, bought her purpose-built two-bed leasehold flat in Chatham, Medway, in 2017, she thought she had made it. “It is a more affordable part of Kent, but it is becoming very unaffordable for me … now I will either lose my property, or I’ll manage to sell and go back to renting.”

Barbara paid £227,000 for her home, having been told her annual service charges would cost £800. “I’ve got a relatively good income of about £2,300 a month, but I now spend about half of my take-home pay on housing costs. My service charges have gone through the roof, and my mortgage payments will go up next March. I can’t afford to pay even more.”

She wants to sell up and move to a more affordable rental locally, but worries that finding a buyer could be difficult because of the ballooning service charges. “I’d rather be spending £900 a month on rent and take my chances with a buy-to-let landlord, this is just too ruinous.”

Hannah, a 35-year-old management consultant, considers herself “incredibly lucky” to have bought a home in east London with her partner before the disastrous mini budget of Liz Truss’s government last autumn caused mortgage misery for millions.

“We bought a three-bed property for £760,000 last year – a bargain because it needs lots of work. I pay one third of our mortgage while my partner pays the rest, which reflects our earnings as individuals. My contribution is currently about a quarter of my monthly income.

“Our mortgage is affordable because we locked in a reasonable rate in August before the Truss debacle. If we had been hit by the interest hikes, we would have pulled out of the sale and stayed in our rented flat in Angel, central London, where we paid £2,400 for a two-bed. We moved out east because we couldn’t afford to buy more than a shoebox in Angel.”

Rents in the couple’s neighbourhood have been skyrocketing, Hannah says. “The two-bed flat next door was rented for £2,400, the landlord increased the cost to £3,200, so the tenants moved out and it’s now empty.”

While housing costs are particularly unaffordable in the south-east and parts of the south-west, householders further north are also struggling.

Joe Scott, 26, who works in sales for an insurance brokerage, decided to stay in Leeds after university, and is currently renting a single room in a house with seven other flatmates.

“My rent is £535 a month, just over 33% of my post-tax salary of about £1,600, including quarterly commission of up to £500,” he says.

Housing has become dramatically more expensive since he moved to the city eight years ago, he says. “In the past six years, my rent has basically doubled. I don’t have to miss meals, but managing is relatively tough. I haven’t been on holiday since 2018. My girlfriend lives in Oxford, I go and see her once a month.”

Scott says local rates are being driven up by large numbers of students. “The university accommodation blocks are nowhere near big enough, and although many properties have been converted into HMOs, there’s still huge demand for rooms. My area, Headingley, has almost no families left, they’ve all been kicked out to create student housing.”

Scott says his experience with Leeds landlords has been “awful”. “My current one has ignored my messages about repairs for weeks. I’m moving out in June, and if I want to have a similar room in the area, I know I’ll have to pay £600, maybe more.”

*Name has been changed