12% of UK adults spending at least 50% of take home pay on housing costs

29th January 2015

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Some one in eight or 12% of UK adults who pay rent or a mortgage are spending at least 50% of their take-home income on their housing costs claims new research from the Debt Advisory Centre (DAC).

The analysis found that, on average across the country, 69% of adults either rent or pay towards a mortgage and spend, on average, around 29% of their take-home pay on housing costs each month. For a fortunate third, housing costs account for less than 20% of their monthly take-home income.

Young people are the most likely to be committing a high proportion of their income to pay their rent or mortgage. The study concluded that those aged between 18 and 24 spend the highest proportion of their take-home pay on housing, with 18% committing more than half of their income to cover their rent or mortgage. 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, one in six, or 17% are spending over half their take home on housing.

Ian Williams, spokesman for DAC, says: “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.”

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