For the first time on record, the total rent bill in the UK is now more than double the total interest being paid by mortgaged homeowners, a study by international real estate adviser Savills has revealed.
Rising numbers of renters unable to access home ownership and low interest rate payments for those with their own homes are driving higher rent in the UK home market.
Renters are now paying over £54 billion in rent to private landlords across Britain. This is more than twice the £26.5 billion mortgage interest paid by owner occupiers - a figure which excludes capital repayments being made on mortgages.
The total private rental bill has risen by £14 billion over the past 5 years. This is a 35 per cent increase, while the number of homes in the private rented sector have risen just 21 per cent.
The increase in private rental bill has been greatest in London, where stretched affordability and constrained mortgage lending, has prevented more aspiring home owners accessing the market, creating greater competition for homes to rent. Here, the total rental bill has risen by 42 per cent over the past five years, to over £20 billion and now accounts for over a third (35 per cent) of the total Great Britain private rent bill and almost four times the total mortgage interest paid by owner occupiers in the capital.
Just five years ago, the gap between the private rental bill and the mortgage interest rate bill was just £7.4 billion. It now stands at £28 billion.