• New analysis Yorkshire Building Society for End Youth Homelessness (EYH) reveals that it is unaffordable for young people (under 25) working full-time for minimum wage to rent independently in England
  • The ‘Affordability Index’ research compares earnings of young people in full time work on minimum wage with the cost of private rented accommodation in regions across England
  • Many young people are unable to access the private rented sector due to prohibitive deposit and starting costs
  • The EYH Housing Fund helps young people to overcome these barriers

End Youth Homelessness (EYH) has published its Affordability Index research, with findings revealing that young people (under 25) in full-time work across England are unable to afford privately rented accommodation anywhere in the country.

The research conducted by Yorkshire Building Society pro-bone for its former charity partner EYH, considers a number of contributing factors including minimum wage, Universal Credit, and average rental costs.

Affordability Index

According to The Resolution Foundation for a rental cost to be considered affordable, it should be no more than 35% of a person’s wage.* 

The Affordability Index however shows that for young people aged 21-24 in England, working full-time and earning the minimum wage of £8.20 per hour, the average rental cost across the country is 71% of their wage.

The most affordable places in England are Liverpool and Hull where the average private rental will cost 38% of the salary of a 21-24 year-old earning minimum wage.

The least affordable areas in England are unsurprisingly concentrated in London with Central London rents the equivalent of 251% of the salary of a 21-24 year-old earning minimum wage.

The index looks at all minimum wage levels by different age groups and highlights that affordability becomes progressively worse for younger people on lower levels.

For example young people aged 18-20 that receive a minimum wage of £6.45 per hour would on average across England need to use 91% of their wages on rent costs. For those under 18 earning £4.55 per hour it jumps to 129% of their wage.

The data also reveals that young people are potentially being discouraged from working and living independently, since a full-time minimum wage job does not improve their financial circumstances in a more meaningful way than Universal Credit. Factoring in the extra associated costs, full-time work would in some cases result in young people being worse-off than counterparts who receive Universal Credit. The result is that in some cases, the Private Rented Sector is even less affordable for young people in full-time work.

Yorkshire Building Society changed its mortgage terms in 2018 to enable borrowers to let to clients who are in receipt of Universal Credit and has been encouraging other mortgage providers to do the same.

End Youth Homelessness Housing Fund

Nick Connolly, Managing Director of End Youth Homelessness said: 

Our Affordability Index research makes evident that young people’s earnings are often too low for average housing across the country let alone pay a deposit or cover the costs of establishing a home.  End Youth Homelessness’ Housing Fund, founded in partnership with Yorkshire Building Society, offers vital support for young people who find themselves in an impossible situation; we help them overcome the stark financial barriers that prevent them standing on their own two feet

This new data lays bare the urgency of the housing dilemma faced by many young people across the country. The prohibitive costs associated with private renting are forcing the most vulnerable young people into desperate situations and COVID-19 has pushed even more young people closer to homelessness. We are proud of our award winning partnership with Yorkshire Building Society, which helps young people overcome the financial barriers holding them back from a safe place to call home.

For more information or if you would like to support the Housing Fund please visit https://everyyouth.org.uk/

Yorkshire Building Society support

Mike Regnier, Chief Executive of Yorkshire Building Society, said:

Our new research findings with EYH are stark. There is not a single town in England where young people on minimum wage can rent affordably. With the average rental costing them 71% of their salary and in some areas up to 251%, many young people are priced out of the private rented sector altogether. At Yorkshire Building Society we are proud to have worked with End Youth Homelessness to help vulnerable young people into their own homes via the Housing Fund which we committed to fund through 2021.

Yorkshire Building Society raised more than £1million for its End Youth Homelessness (EYH) partnership (2017-2020) and helped 455 young people and 95 dependent children into their own rented homes to date.


*Drew’s story is based on a real case study and indicative of the support End Youth Homelessness provides to young people

When Drew’s family relations broke down, he felt he had no option but to leave home. Drew was working full-time on minimum wage at a local factory, but could not afford to rent privately, as his income was not enough to cover the deposit and monthly payments. Out of desperation, he turned to sofa surfing, calling old friends and acquaintances just so he could have a roof over his head. Drew was then due to move into a caravan park offered by a friend, but when COVID-19 hit the nation, the park shut down, leaving him with nowhere else to go. 

He said:

I just felt so desperate, and the uncertainly was awful. Having to get up and go to work after a night of sofa surfing is tough and not something I would wish on anyone. I just wanted somewhere secure to go.

Drew was trying to hold on to his job, but was struggling to carry on without the security of a home. The exhaustion eventually took its toll and his job was now at risk.

Things changed when Drew approached his local End Youth Homelessness charity. Their Housing Fund provided Drew with the deposit needed to secure a flat, as well as equipping the flat with everything he needed.

Drew added:

Living on such a small budget is still a big challenge, but without EYH, I wouldn’t have been able to secure a place and get set up.  Even though I’m working, there is no way I could have saved enough for a deposit or for items like a bed, while also paying rent. I feel lucky to have my independence and to be getting by.

*Rental affordability taken from The Resolution Foundation report https://www.resolutionfoundation.org/app/uploads/2014/08/Housing-pinched-Understanding-which-households-spend-the-most-on-housing-costs.pdf

All information correct at time of publication.