Accredited official statistics

Chapter 2: Housing costs and affordability

Published 28 November 2024

Applies to England

Introduction

This chapter describes housing costs, including deposits of first time buyers and mean/median weekly rent and mortgage payments. It goes on to discuss affordability as the proportion of a weekly household income spent on housing costs as well as rent arrears, presence/absence of housing support and presence of savings.

In this chapter, recent first time buyers are households who have purchased a property that is their main home in the last three years. We use a three year threshold to ensure the sample is large enough for analysis, though the number of first time buyers in the EHS is still relatively small and the data are prone to fluctuation.

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

Housing costs

There are differences in the methodology of the English Housing Survey compared with Index of Private Housing Rental Prices, UK Statistical bulletins - Office for National Statistics (IPHRP). 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.

Finances of recent first time buyers

The average (mean) deposit of a first time buyer in 2023-24 was £55,372 (£32,700 median). Given this, it was not surprising that the majority of first time buyers were in the top two income quintiles (32% in quintile 4, 28% in quintile 5) corresponding to the highest incomes, Annex Tables 2.1, 2.2, and Figure 2.1.

Figure 2.1: Weekly gross household income for first time buyers, 2023-24

^{Base: all recent first time buyers
Notes:
1) underlying data are presented in Annex Table 2.2
2) first quintile:£85-£372, second: £372-£627, third: £627-£952, fourth: £952-£1,437, fifth: £1,437-£24,014
Source: English Housing Survey, full household sample}

Of first time buyers who had a mortgage, nearly all (96%) had a repayment mortgage. Over half of first time buyers (55%) with a mortgage had taken a repayment period of 30 years or more. A small proportion (7%) had a 1-19 year mortgage and the remaining first time buyers (38%) had a repayment period of 20-29 years. Compared to five years ago in 2018-19, the proportion of first time buyers with a mortgage of 30 years or more has increased by 10% (from 45% in 2018-19 to 55% in 2023-24), Annex Table 2.1.

Around three in five first time buyers (60%) paid a deposit of less than 20% of the purchase price of their property. This includes 20% of first time buyers who paid a deposit between 0% and 9%, and a further 40% who paid a deposit of between 10% and 19% of the purchase price of their property. A small proportion (5%) bought their first home outright.

In 2023-24, most first time buyers (85%) funded the purchase of their first home with savings, 31% reported receiving help from family or friends, 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, there was an overall increase since the early 2000s, as well as an overall diversification of the source of funds required for a first time buyer deposit. First time buyers now draw upon a wide range of sources to make up their deposit.

Figure 2.2: Source of deposit for recent first time buyers, 2018-19 to 2023-24

^{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 2023-24, the average (mean) mortgage payment was £222 per week and the median mortgage payment was £185 per week. Mean mortgage payments were higher in London (£317) than in the rest of England (£209). Compared to five years ago (2018-19), the average weekly mortgage payment in London increased by £71 from £246 to £317. Over the same period the mean weekly mortgage payment in the rest of England increased by £47, from £162 to £209, Annex Table 2.3.

Rents

The average (mean) rent for households in the social sector was £118 compared with £237 per week in the private rented sector, a difference of £119 per week, Annex Table 2.4.

Social and private rents are higher in London than in the rest of England. In 2023-24, the average (mean) private rent in London was £368 per week, compared to £191 per week outside of London. The average social rent was £157 per week in London, compared to £109 per week in the rest of England.

The average (mean) weekly social rent (£118) also significantly increased across England, compared to last year (£111), up from £102 in 2018-19. This was the case for mean weekly social rents for both Local Authority and Housing Association properties.

Similarly, the average (mean) weekly private rent across England increased by £36, from £200 in 2018-19 to £237 in 2023-24.

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. The measure of income we use is 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, we assume all household members contribute to the rent or mortgage; for the HRP and partner measure, we assume only the HRP and partner contribute.

On average, mortgagors spent 19% of their household income on mortgage payments, whereas rent payments, with housing support included in income, were 26% for social renters and 34% of household income for private renters. If income from housing support was excluded in the calculation, the average proportion of income spent on rent would be 34% for social renters and 39% for private renters, Annex Table 2.5 and Figure 2.3.

Figure 2.3: Mortgage/rent as a proportion of household income (including and excluding housing support), by tenure, 2023-24

^{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}

Over the last 10 years, the proportion of household income that mortgagors spent on their mortgage remained similar (18% in 2013-14 and 19% in 2023-24). The change in the proportion of household income (including housing support) that both renters and mortgagers spent on rent or mortgage between 2013-14 and 2023-24 was not significant. However, the proportion spent excluding housing support decreased for social renters (39% in 2013-14 and 34% in 2023-24), Annex Table 2.5.

When using HRP and partner income in the affordability calculation, mortgagors spent an average of 20% of their income on mortgage payments in 2023-24, whereas rent payments were 29% of income for social renters and 39% 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 45% for private renters.

Mortgage and rent arrears

In 2023-24, approximately 68,000 (0.9%) mortgagors reported being in mortgage arrears. This is a significant decrease from the 2% of mortgagors who were in arrears 10 years ago (2013-14). The proportion of mortgagors who reported being in arrears has remained below 1% since 2015-16, including during the COVID-19 pandemic years, Annex Table 2.6.

In 2023-24, 86% of mortgagors reported they found it very or fairly easy to afford their mortgage, a decrease from 89% of mortgagors in 2022-23. Consequently, more respondents reported a rise in some level of difficulty in affording repayments, with 12% of mortgagers finding it fairly difficult and 2% finding it very difficult, Annex Table 2.8, Figure 2.4.

Figure 2.4: Ease of affording mortgage, 2021-22 to 2023-24

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

In 2023-24, 2% of private renters reported currently being in rent arrears and a further 3% reported they had fallen behind with rent payments in the 12 months prior (5% of private renters in arrears overall). This was similar to the proportion of private renters in current or previous rental arrears in the last year in 2022-23 (5%), but significantly lower than in 2021-22 (7%), Annex Table 2.7.

Social renters were significantly more likely to report being in rent arrears than private renters: 9% of social renters reported they were currently in arrears, and an additional 6% reported they had fallen behind with rent payments in the 12 months prior (15% of social renters in arrears overall).  Within the social rented sector, those renting from a local authority were more likely to be in arrears (17%) than those renting from a housing association (14%), Annex Table 2.7.

In 2023-24, just under a third of private renters (32%) reported finding it either fairly or very difficult to afford their rent, an increase on the proportion seen in 2022-23 (29%), and pre-pandemic (27%). Despite being more likely to be in arrears with their rental payments, social renters were less likely than private renters to report difficulty paying their rent (28%), and this figure has remained consistent with the pre-pandemic years (27% in 2019-20), 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.

Receipt of housing support 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 the benefit. 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 2023-24, 63% of social renters (2.5 million households) and 24% of private renters (1.1 million households) received housing support to help with the payment of their rent, Annex Table 2.10 and Figure 2.5.

The proportion of social rented households who received housing support has increased since last year (59% in 2022-23). However, the proportion of private renters who received housing support has remained the same as 2022-23 (24%).

Both tenures show an increase in housing support receipt over the last five years (57% of social renters and 20% of private renters received housing support in 2018-19).

Figure 2.5: Percentage of private and social renters in receipt of housing support, 2011-12 to 2023-24

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

The average amount of housing support received was £145 for private renters and £95 for social renters in 2023-24. Both have increased since last year when private renters received £133 and social renters received £87 in 2022-23. They have also both seen an increase in the last five years (£119 and £80 respectively in 2018-19).

In 2023-24, 71% of renters who were not working received housing support. This was an increase from 67% in 2022-23. The proportion of those working (full or part-time) receiving housing support had not changed (23%).

Social renters were more likely to be receiving housing support in 2023-24 whether working (37%) or not working (80%) than private renters (17% and 49% respectively).

Also, in the last five years, there has been an increase in those receiving housing support while working for both private renters (a rise to 17% from 12% in 2018-19) and social renters (a rise to 37% from 28% in 2018-19), Annex Table 2.11.

Savings

In 2023-24, around two-thirds of households in England (65%), equating to 15.9 million households reported they had savings, Annex Table 2.12.

Across all tenures, the proportion of households with savings remained higher than before the COVID-19 pandemic. Outright owners were most likely to have savings (85%, up from 75% in 2019-20), followed by those buying with a mortgage (71%, up from 60%), private renters (52%, up from 40%) and social renters (28%, up from 20%), Figure 2.6.

Figure 2.6: Proportion of households with savings, by tenure, 2019-20 to 2023-24.

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

Underlying Data

For data underlying this report, see the Annex tables. For the charts in this report, see Figures.

Technical notes and glossary

For technical information, please see the technical notes.

For a detailed glossary of terms please see the glossary.