Private tenants in the UK are paying the highest rents in Europe – at the same time that owner occupiers are benefiting from cheap mortgages.

A new report from the National Housing Federation says tenants in the UK pay almost double the European average at 902 Euros per month (around £730). The average European rent is 481 Euros.

High rents also mean that British tenants spend more of their income on rent – 39.1% compared with the European average of 28%.

Rents in Holland and Germany are about half what they are in the UK.

Separately, the British Bankers Association said that competition among lenders means “great mortgage deals” are on offer, while a case study on MoneyWeek provides insight: a couple in their early 40s earn some £70,000 a year and have a deposit of just over £100,000 to buy the one-bedroom flat they are currently renting and which is now for sale at £320,000.

A mortgage could cost them less than half of their current rent. However, as the woman has a new business, they have so far been turned down for the mortgage they need.

David Orr, chief executive of the NHF, said: “How can we expect people to raise families, start businesses or save for their first home if they don’t even know where they will be able to afford to live?

“High rents are just one symptom of the housing crisis. We are simply not building enough due to under-investment and problems with the land market.”

There is also a culture of longer-term residency in properties on the continent, unlike in the UK where people move more often owing to short tenancy agreements, the Federation added.

According to the British Bankers Association, overall mortgage approvals, including remortgaging, were 2% higher in May year on year, but it estimates that house purchase approvals were down 3%.

The MoneyWeek story is here