Accredited official statistics

Chapter 2: Housing costs and affordability

Published 14 December 2023

Applies to England

Introduction

This chapter begins by describing housing costs, including deposits of first time buyers and mean/median weekly rent and mortgage payments. It then discusses affordability as the proportion of a weekly household income spent on housing costs. Rent arrears, presence/absence of housing support and presence of savings are then discussed.

First time buyers are households that have purchased a property that is their main home in the last three years. A three year threshold is used to ensure that the sample is large enough for analysis.

For an introduction and summary of main findings in this report as a whole, please see the Introduction and Key Findings page.

Housing costs

There are differences in the methodology of the English Housing Survey compared with ONS experimental quarterly Index of Private Housing Rental Prices (IPHRP[SM2] ). The English Housing Survey average weekly private rents over time reflect changes in price, quality and composition of the private rented stock. In contrast, the IPHRP specifically excludes both changes in composition and quality to ensure only pure price change is captured.

Income and mortgage type

The average (mean) deposit of a first time buyer in 2022-23 was £50,051 (£30,000 median). Given this, it was not surprising that 58% of first time buyers were in the top two income quintiles, Annex Tables 2.1, 2.2, and Figure  2.1.

Figure 2.1: Weekly gross household income for first time buyers, 2022-23

^{Base: all recent first time buyers
Notes:
1) underlying data are presented in Annex Table 2.2
2) first quintile: £76-£360, second: £360-£596, third: £596-£888, fourth: £888-£1,372, fifth: £1,372-£16,805
Source: English Housing survey}

Of first time buyers who had a mortgage, nearly all (95%) had a repayment mortgage. Over half of first time buyers (52%) with a mortgage had taken a repayment period of 30 years   . A small proportion (4%) had a 1-19 year mortgage. The remaining first time buyers (44%) had a repayment period of 20-29 years. There is no significant difference in these numbers from 5 years ago, Annex Table 2.1.

Around two thirds of first time buyers (65%) paid a deposit of less than 20% of the purchase price of their property. This includes one fifth of first time buyers who paid a deposit between 0% and 9%, and a further 45% who paid a deposit of between 10% and 19% of the purchase price of their property. A small proportion (10%) bought their first home outright.

In 2022-23, most first time buyers (87%) funded the purchase of their first home with savings, 36% reported receiving help from family or friends, up from 27% the previous year, while 9% used an inheritance as a source of deposit, Figure 2.2. While the proportion of first time buyers who receive help from family and friends has recently fluctuated year-on-year, we have seen an overall increase since the first time this was reported (22% of first time buyers had help from family and friends in 2003-04, EHS 2013-2014 Household Report) as well as an overall diversification of the source of funds required for a first time buyer deposit – first time buyers now draw on a wider range of sources to make up their deposit.

Figure 2.2: Source of deposit for recent first time buyers, 2018-19 to 2022-23

^{Base: all recent first time buyers
Notes:
1) more than one answer could be given
2) underlying data are presented in Annex Table 2.1
Source: English Housing survey, full household sample}

Mortgage costs

In 2022-23, the average (median) mortgage payment was £173 per week. Median mortgage payments were higher in London (£256) than in the rest of England (£162). Between 2021-22 and 2022-23, the median mortgage payment in England increased from £154 to £173. The median mortgage payment outside of London increased by £19 from £143 to £162, Annex Table 2.3.

The average (mean) mortgage payment was £208 per week. Mean mortgage payments were higher in London (£333) than in the rest of England (£190). Since 2020-21, the average weekly mortgage payment in London increased by £89 from £244 to £333. Over the same period the mean weekly mortgage payment in the rest of England  increased by £27, from £163 to £190.

Rents

The average (mean) rent for households in the social sector was £111 compared with £232 per week in the private rented sector, a difference of £121 per week, Annex Table 2.4.

Social and private rents are higher in London than in the rest of England. In 2022-23, the average (mean) private rent in London was £356 per week, compared to £190 per week outside of London. The average social rent was £140 per week in London, compared to £105 per week in the rest of England.

Affordability

In this section, affordability is explored. A simple measure of housing affordability has been derived by calculating the average proportion of income spent on housing. The proportion of income spent on mortgage payments (both the repayment element and the interest element) is compared with the proportion spent on rents in the social and private rented sectors. Housing-related costs, such as water and fuel bills, insurance, maintenance costs and council tax are not included in the calculation. Income is taken to be the gross weekly household income, including and excluding benefits. Outright owners are excluded from this analysis as they have no mortgage costs.

Two different calculations are made: one based on the household income (i.e. the income of all the members of the household), and another based on HRP and partner income only (irrespective of whether there are other adults in the household). For both measures it is not known which members of the household actually contribute to the rent or mortgage. For the household measure, it is assumed that all household members contribute to the rent or mortgage; for the HRP and partner measure, it is assumed that only the HRP and partner contribute.

On average, mortgagors spent 18% of their household income on mortgage payments, whereas rent payments including housing support were 26% for social renters and 32% of household income for private renters. If housing support was excluded, the average proportion of income spent on rent would be 34% for social renters and 37% for private renters, Annex Table 2.5 and Figure 2.3.

Figure 2.3: Mortgage or rent as a proportion of household income (including and excluding housing support), by tenure, 2022-23

^{Base: all households making mortgage or rent payments
Notes:
1) underlying data are presented in Annex Table 2.5
2) excludes households without a mortgage (i.e. outright owners), those with part-mortgage and part-rent (i.e. shared owners) and zero rent households
3) includes income from all household members irrespective of whether or not they contribute to the rent or mortgage
Source: English Housing Survey, full household sample}

Between 2012-13 and 2022-23, the proportion of household income that mortgagors spent on their mortgage remained similar (19% in 2012-13 and 18 in 2022-23). The proportion of household income (including housing support) that social renters spent on their rent decreased from 28% to 26%. In the same period, the proportion of household income that private renters spent remained similar (34% in 2012-13 and 32% in 2022-23).

When HRP and partner income is used, mortgagors spent an average of 19% of their income on mortgage payments in 2022-23, whereas rent payments were 29% of income for social renters and 40% of joint income for private renters (including housing support). Excluding housing support, the average proportion of income spent on rent was 37% for social renters and 46% for private renters.

Mortgage and rent arrears

In 2022-23, approximately 34,000 (0.5%) mortgagors reported being in arrears. This is similar to the proportion in 2021-22 (0.7% or 52,000 households). The proportion of mortgagors who reported being in arrears has remained at or below 2% since 2011-12, Annex Table 2.6.

In 2022-23, 89% of mortgagors reported they found it very or fairly easy to afford their mortgage, a decrease from 93% of mortgagors in 2021-22. Within this, the proportion finding it very easy fell from 48% to 37%.   Consequently, more respondents reported a rise in some level of difficulty in affording repayments, with 9% of mortgagers finding it fairly difficult and 1% finding it very difficult, Annex Table 2.8, Figure 2.4.

Figure 2.4: Ease of affording mortgage, 2021-22 to 2022-23

^{Base: all mortgagors (including shared owners) who are up to date with mortgage payments
Note: underlying data are presented in Annex Table 2.8
Source: English Housing Survey, full household sample}

In 2022-23, 2% of private renters reported being in rent arrears and a further 4% reported they had fallen behind with rent payments in the 12 months prior. This was similar to the proportion who reported being currently in arrears (3%) or in arrears in the 12 months prior (4%) in 2021-22, Annex Table 2.7.

Social renters were more likely to report being in rent arrears than private renters: 9% reported they were currently in arrears, and 6% reported that they had fallen behind with payments in the 12 months prior to the interview.

In 2022-23, just over a quarter of private renters (29%) reported finding it either fairly or very difficult to afford their rent, similar to the proportion in 2021-22 (26%). A similar proportion of social renters (27%) reported finding it either fairly or very difficult to afford their rent. Annex Table 2.9.

Housing support

Housing support is a means-tested benefit provided by the state to low income households. It includes both legacy Housing Benefit, as well as the housing element of Universal Credit. This section compares receipt of housing support by households in the social and private rented sectors.

Housing support receipt is reported on a household level, and households will be counted as in receipt of support if at least one person in the household receives support for housing costs, though the respondent may not necessarily know about benefit receipt across all household members. More than one person in the household could be in receipt of support. EHS figures may differ from those published by the Department of Work and Pensions, because we define households differently. For more information, please see the Glossary.

In 2022-23, 59% (2.4 million households) of social renters and 24% (1.1 million households) of private renters received housing support to help with the payment of their rent, Annex Table 2.10 and Figure 2.5.

The proportion of private renters receiving housing support in 2022-23 (24%) remained similar to the proportion in 2021-22 (25%), although there was an increase from 20% in 2017-18. The proportion of social renters receiving housing support (59%) has remained similar to 2021-22 (57%), though is significantly lower than in 2012-13 (66%).

Figure 2.5: Percentage of private and social renters in receipt of housing support, 2011-12 to 2022-23

^{Base: all renting households
Note: underlying data are presented in Annex Table 2.10
Source: English Housing Survey, full household sample}

Social renters in receipt of housing support received an average of £87 per week, lower than the average amount received by private renters (£133). The average amount of housing support received by private renters was higher than in 2019-20 (£113), though was similar to recent years. The average amount of housing support received by social renters was also higher than in 2019-20 (£81), though was similar to recent years.

Over a third (36%) of working social renters received housing support in 2022-23, an increase compared to 2021-22 (30%). This proportion was lower for private renters, where 17% of working private renters received housing support in 2022-23, similar to 2021-22 (18%) but an increase compared to 2019-20 (11%), Annex Table 2.11.

Savings

For 2022-23, the proportion of households with savings increased compared to 2021-22. Around 66% (15.8 million) of households in England reported they had savings, compared to 64% in 2021-22, Annex Table 2.12 and Figure 2.6.

Owner occupiers were the most likely tenure to have savings, with 79% (12.3 million households). Those who owned outright were more likely to have savings (86%) than were mortgagors (71%). The proportion of those who owned outright with savings increased from 83% in 2021-22, though is similar to 2020-21 (87%). The proportion of mortgagors without savings remained similar (27% in 2021-22).

Private renters (54%, 2.4 million households) were more likely to have savings than social renters (27%, 1.1 million households). The proportion of social and private renters with savings remained similar to 2021-22 (apparent increases are statistically insignificant).

Figure 2.6: Proportion of households with savings, by tenure, 2019-20 to 2022-23.

^{Base: all households
Note: underlying data are presented in Annex Table 2.12
Source: English Housing Survey, full household sample}

Technical notes and glossary

For technical information regarding caveats in this report, please see the technical note.

For a detailed glossary of terms please see the glossary.