One of the big demographic problems for the insurance industry is the lack of disposable income that under 35s have left each month after rent, council tax, food, heating and commuting costs are met. New research reveals that 19% of people are spending more than half of their monthly net household income on housing costs such as mortgage or rent payments, utility bills and council tax, and 4% spend over 75%. The average is 34%.
A possible reflection of the gender pay gap, the findings, which are from Engen Group, the UK based innovation and property business which focusses on addressing environmental challenges such as affordable and sustainable housing, reveals the corresponding figures for women are 26% and 6% respectively, and 13% and 3% for men.
Affordable housing has been defined as spending 35% or less of your monthly income on housing costs. Engen’s research found 39% of people spend more than this, but for those aged 18 – 34, the corresponding figure is 47%.
Engen’s research suggests the problem of affordable housing in the UK is becoming worse as 38% of people said they have spent more of their income on housing costs over the past 12 months, compared to 8% who say they have spent less. Similarly, for the next 12 months, 38% anticipate they will spend more whereas 8% expect expenditure to fall.
Graeme Boiardini, CEO of Engen Group said: “Our findings are very alarming but given the housing shortage in the UK not entirely surprising. Thankfully building more affordable housing is at the top of the political agenda, so hopefully over the next few years we will see significant inroads being made into tackling this problem.”