The cost of affording a place to live is placing significant pressure on UK household budgets, according to the May 2024 Money Statistics produced by The Money Charity.
Steep price rises in all areas of the housing market, from home ownership to renting, are creating additional burdens on already-pressured household budgets across the UK. Renters, in particular, are increasingly vulnerable to the rising cost of living, with multiple advice agencies (Citizens Advice Bureau, StepChange Debt Charity, Christians Against Poverty) all reporting that renters, both private and social, are the largest group receiving advice. The median private rent across the UK in April 2024 stood at £1,293 per month (£15,500 annually) while in London this figure was £2,070 per month (£24,840 annually).
Meanwhile, house prices continue to rise, with HM Land Registry noting a 1.8% increase in the average UK house price in the year to February 2024. This has had a knock-on effect on mortgage debt, as the average full-time UK employee can expect to spend around 8.3 times their annual earnings on purchasing a home. The Help to Buy ISA scheme, introduced in December 2015 and closed to new applications in November 2019, is reported to have supported 592,105 property completions in the seven years to December 2023.
In March 2024, 21.8% of UK adults reported that they were finding it either fairly or very difficult to manage financially, with increasing signs of housing indebtedness. Both mortgage and landlord possession orders are on the rise, with the equivalent of 199.5 landlord possession orders made every day in Q1 2024. There were also 29,991 individual insolvencies reported in England and Wales in the three months to April 2024, equivalent to 333 people per day.
Michelle Highman, chief executive of The Money Charity, said: “Recent months and even years have been incredibly tough on the budgets of countless UK households and this month’s figures reinforce that, with far too many individuals and families struggling to even have a home, let alone maintain one. Circumstances clearly remain deeply challenging right across the UK, with too many having to face the kind of decisions they shouldn’t.
“Now with an election on the way, finding the way forward to face down and improve these and other financial areas will be considerable challenges for the next government. Alongside the work we continue to do each day, we will keep strongly advocating for options which will help the UK increase its financial wellbeing.”
Other striking numbers from the May Money Statistics include 27% of over-65s relying on in-person services to do their banking, while 31% of the same age group say they are uncomfortable using online banking. Government debt increased by £521.9m a day in the three months to April 2024. The average age of a UK first-time house buyer in 2023 was 32 years old.
