One in 10 private renters find housing costs ‘barely manageable’ or ‘unaffordable’, according to new research.

The Tenant Trends report from mortgage market research firm Pegasus Insight revealed that 8% of tenants in the private rental sector said their monthly payments were ‘barely manageable’, while 2% said they were ‘unaffordable’.

These respondents said they were falling behind in their rent, and some suggested they would need to move soon. A third – 33% – said their rental payments put pressure on their budget.

Some 46% of respondents said their rent was manageable and they could afford it comfortably, while 11% said it was ‘very affordable’ and well within their budget.

In the last 12 months, 40% of renters claim they have had to choose between paying their rent and other essential expenses, 29% occasionally and 12% regularly. Younger tenants (Aged 18 to 34) and those who either work multiple jobs or are unemployed were by far the most likely to have found themselves in this position.

Younger people are also more likely to count among the 10% of tenants who have missed a mortgage payment in the last year (13%), along with those who say they have been ‘hit hard’ by the cost-of-living crisis (20%). The typical arrears period was two months. Younger people are more likely to now be back on track with their payments (79%) compared to the ‘hard-hit’ cohort (51%).

Half of tenants have seen their rent rise in the past 12 months, while only 1% have seen a fall. Those renting through a letting agent are more likely to have seen an increase (61%), compared to tenants renting directly from their landlord (54%). The typical increase was 14%, which equates to an average of £100 extra a month. The predominant reason given for the increase was ‘linked to inflation’ (39%).

Despite this, 81% of tenants express satisfaction that their rent represents value for money – 35% say their rent offers ‘average’ value for money, 29% ‘quite good’ and 17% ‘very good’ value for money. Only 14% say their rent offers ‘quite poor’ and 5% ‘very poor’ value for money.

Mark Long, managing director and founder of Pegasus Insight, commented: “This research highlights some of the discrepancies at play in the private rented sector with a minority of tenants facing genuine economic hardship, many financially stable but making sacrifices to cover their rent and others taking repayments in their fiscal stride.

“The 10% who are struggling may need landlord forbearance – the figures suggest that many tenants given a little breathing space do indeed catch up on missed payments relatively quickly. This may give some comfort those landlords concerned about the Renter’s Rights Bill, which will lengthen the period between non-payment of rent and the potential commencement of the eviction process from two months to three.

“But overall, this research serves to illustrate the resilience of tenants in the private rented sector (PRS), with the vast majority keeping up their repayments, despite half experiencing chunky increases in rent over the past year. What’s more, despite these record rises, the fact that 81% are still content their rent represents value for money strikes a resoundingly positive note.

“These insights are just a fraction of the results revealed in our latest Tenant Trends research report. We will continue to track tenant profiles, rental experience and future plans.

We believe that a deeper understanding of tenant finances, attitudes and aspirations is key to evolving the PRS and supporting those landlords who supply it.”