Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Over a million German households struggle with rents

German property

12.9 percent of tenant households in large German cities live below the subsistence level after they pay their rent, according to the study funded by the Hans Böckler Foundation

A study has revealed that more than a million households in Germany live below the subsistence level after they have paid their rent. Single-parent households are among the worst affected.

According to the study funded by the Hans Böckler Foundation, 12.9 percent or 1.1 million of tenant households in large German cities live below the subsistence level after they pay their rent. The subsistence level is the amount of income a household has remaining after they have paid their rent, as is stipulated in German unemployment law.

The study was undertaken by the Humboldt University in Berlin. The research team was led by Dr Andrej Holm and collected data from the 2018 microcensus. The official housing census collects data from German households every four years.

The study also revealed that single-parent households are the most affected, with only a quarter living above the subsistence line once rent had been deducted. Nearly 2.1 million people live in households struggling below the subsistence line.

High rents and living costs also contribute to the widening income gap in big cities, with the income of the richest households 4.4 times higher than the poorest households, even before rent and ancillary costs had been deducted. After deducting these costs, the richest households enjoy an income that is 6.7 times that of the lowest-earning households.

According to the Hans Böckler Foundation, the reason for this is that poorer households spend a much higher percentage of their income on rent, despite living in smaller, less lavish apartments.

The Federal Statistical Office (Destatis) has also looked at the burden of high housing costs on German households. It found that, in 2019, nearly 14 percent of the population (11.4 million) lived in households that were struggling with high rents.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.