Property News > Government survey reveals financial gap opening between homeowners and renters

Government survey reveals financial gap opening between homeowners and renters

Statistics from the government’s resilience survey point to a financial gap which is beginning the open up between mortgage holders and private renters. 

According to the second wave of the survey, the results of which were released in late April 2021, just 1% of current mortgage-payers are in arrears - down from the 6% recorded in mid-2020. However, the proportion of those renting in the private sector in arrears has tripled from 3% to 9% during the same period. 

The data also reveals that 4% of those in arrears were up to one month behind, 2% were more than one month behind but less than two and 1% were more than two months behind. The others did not declare how behind they were. 

Further analysis of the findings also revealed that a further 8% of respondents were ‘very or fairly likely’ to fall behind with their rent payments over the next three months. By contrast, the same could be said for just 3% of mortgage holders. 

The most commonly-cited reasons for struggling to keep up with payments were being furloughed on reduced pay (15%) or working reduced hours with less overtime opportunities (14%). 

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said in reaction to the report: “The pandemic has dragged hundreds of thousands of people the wrong side of the resilience gap, and renters, self-employed people, lone parents and furloughed workers have been hit particularly hard.”

She added: “Overall, more households have savings than before the pandemic, and 13% of people have been in a position to actually put more aside, but those in full time employment and people who own a house with a mortgage are much more likely to fall into this bracket.”

She added: “Meanwhile, those who rent are more likely to have eaten into their savings to pay rent. They’ve struggled with their bills too. Renters have found it far harder to pay their bills: one in ten are behind on rent, and almost one in four are behind on at least one bill.”

The resilience survey derives from the government’s English Housing Survey. In June 2020, the government sought to investigate the impact of Covid-19 on the UK property market, and its findings were released in December. The study’s third wave is scheduled to run later this year to coincide with the easing of restrictions. 

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