May the fourth be with you

Modern town houses

Modern town houses - Credit: Archant

May 4 is the the day when UK rental sector tenants will have finally earned enough this year so far to cover the annual cost of their rent, according to new research.

Halifax calculated that on average, it would take 124 days for tenants to have earned enough in their take-home pay to equal the cost of their rental payments for the whole year, meaning that “rental freedom day” this year falls on May 4.

By contrast, with the cost of borrowing cheap, “mortgage freedom day”, when home owners would have earned enough to pay off their mortgage for the whole year, has already happened, falling on April 18.

Halifax based average rental payments on data from its sister brand Birmingham Midshires.

The research was based on the cost of renting a three-bedroom house.

With the cost of renting varying across the UK, rental freedom day falls earlier in some parts of the country and later in others.

In Northern Ireland, rental freedom day fell on March 27, while in Wales it took place on April 18 and in Scotland it fell on April 19.

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According to Halifax’s calculations in England overall, rental freedom day will fall today, Thursday May 7.

Within England, the North was the earliest region to achieve rental freedom day, on April 9, while tenants in London will have the longest wait, until July 8.

Craig McKinlay, mortgage director at Halifax, said: “This year rental freedom day comes more than a week earlier than last year, and this, coupled with the increasing number of mortgages that require lower deposits, is good news for renters who are saving to buy their own homes.”