The rental trap: soaring costs mean tenants are half as likely to afford monthly outgoings as homeowners

Soon only those who already own or inherit a home will be able to get onto the property ladder, as renters are more likely to be trapped in spiralling costs, a new survey reveals.

Research by financial services group Momentum UK and the University of Bristol found that while almost half of the homeowners surveyed are able to cover monthly outgoings, this falls to just 20 per cent of renters.

In London, spending on rent accounted for 34 per cent of disposable income for private renters in 2014. In the North-East, this figure was 15 per cent, while the East Midlands, Yorkshire and The Humber and Northern Ireland all had percentages below 20 per cent.

Despite the fact that renters are just as likely to budget and monitor their day-to-day spending as homeowners, they are more than twice as likely to have no savings, insurance or pension products in place. Double the amount of renters missed a minimum repayment on a credit card, loan or other debt in the last 12 months, compared with homeowners.

Although homeowners are hit by stamp duty and other purchasing fees, moving house can typically cost a London renter up to £3,700 – including deposit, letting agent's fees and the first month's rent.

Even non-fee paying flatsharers need to find almost £1,500 upfront, says house-sharing website Spareroom.co.uk.

Ferdi Van Heerden, CEO of Momentum UK, says that the number of private renters doubled between 1988 and 2014. "By contrast, the prevalence of mortgaged home ownership among under-40s is lower than in 1977, when the Right to Buy was introduced to address just such an issue.

"If we do not address the UK’s rental trap, we are effectively creating a lasting social divide between the ‘haves’ and ‘have nots’. We cannot trust the current system to dependably manage itself and action must be taken to address this."