Happy Rental Freedom Day: yes, in May you’ll have just earned enough for this year’s rent

Rent your home? Well it’s time to celebrate – after 132 days the average UK tenant has finally earned enough to cover the annual cost of this year’s rent

If you rent your home, it’s probably your biggest outgoing – but have you ever thought about how far into the year you need to work before you can cover the annual cost of the roof over your head?

Well, according to mortgage provider Halifax, it takes until 12th May for the average UK tenant to earn enough to pay their annual rent – and research has shown that tenants have to work
for a month longer than new homeowners before they can meet these
annual outgoings.

If you’re renting, it’s time to celebrate reaching Rental Freedom Day, the day that the average UK tenant has earned enough to cover the annual cost of this year’s rent  IPC Images

However, according to Halifax, new homeowners pay the mortgage by 13th April.

‘Housing costs are usually people’s biggest outgoing every month,’ says Craig McKinlay, Mortgage Director at Halifax.

‘Our calculations show that there’s a significant difference between buying and renting. If you rent your home, then you will need to do about a month’s extra work to cover the annual cost of renting compared with paying a mortgage.’

The May date for UK tenants calculated by Halifax assumes that all salary earnings from 1st January are used solely towards the annual cost of rent.

Key to the door: some tenants will reach Rental Freedom Day sooner than others - the North West is first to achieve rental freedom on 5th April, compared to the UK average of 12th May  IPC Images

Rental Freedom Day does vary around the country for tenants, with the North West first to the post on 5th April. Next up is the East Midlands (13th April) and Yorkshire & the Humber (15th April).

Londoner’s will have to work for six months before they reach their rental freedom day of 25th June.

But before you rush out to spend the rest of that hard-earned cash, there’s a word of caution. The Tenant Arrears Tracker, published by LSL Property Services, shows the number of tenants more than two months behind on payments rose to 94,000 in the first quarter of 2013.

You could be better off keeping that cash in the piggy bank for now…

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