Britain’s cost of living squeeze is rocking the property sector, driving up costs for tenants and mortgage holders.
With rents rising faster than wages, the average UK tenant is now spending more than 28% of their pay before tax on rent, figures compiled by the property portal Zoopla show.
That means people are spending more of their wages on rent than at any other time in the last 10 years.
Average rents for new lets have also risen, Zoopla reports – jumping 10.4% in a year. With wages only growing by 5.7% during 2022, it becomes harder for people to afford places.
In April, rent in London was 13.5% higher than a year ago, in Scotland it was 13.1% higher, and in the north-west of England there was a 10.5% increase.
Richard Donnell, the executive director of research at Zoopla, said there were signs of financial stress for tenants, particularly those on low incomes.
He added: “The impact of higher rents is not uniform with those on low incomes bearing the brunt, with increasing signs of stress.”
Food price inflation across Great Britain has eased but prices are still rising at a painfully high pace.
Annual grocery inflation dropped to 16.5% for the four weeks to June 11, analysts at Kantar have reported, the lowest level recorded in 2023.
That is a fall from the 17.2% recorded a month ago, and below the record 17.5% recorded in March.
But this still means supermarket prices are rising much faster than wages, or the wider measure of consumer price inflation (which was 8.7% in April – we get May’s figure tomorrow).
Investors are digesting an overnight rate cut in China. The People’s Bank of China has cut its one-year and five-year loan prime rates 10 basis points each (0.1 percentage point), as Beijing tries to stimulate its economy.
The agenda
• 10am BST: eurozone construction output in April
• 1.30pm BST: US housing starts and building permits data for May
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