0:01 AM, 21st November 2023, About A year ago
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Renting in London is still the most expensive in England, but the capital has also seen the biggest improvement in rental affordability over the last five years, according to a new analysis.
Estate and letting agents Benham and Reeves have analysed data from the Office for National Statistics (ONS) on rents and incomes across different regions of England from 2017 to 2022.
The analysis revealed how the proportion of income spent on rent has changed over time.
The latest data (2022) shows that the average rent in England is £795 per month, while the average income is £3,050.
This means that the average renter pays 26% of their monthly income on rent and the ratio has remained unchanged since 2017, indicating that rental affordability has not improved or worsened at the national level.
Marc von Grundherr, a director of Benham and Reeves, said: “Rental market affordability has long been a problem for the nation’s renters and while the percentage of income required to cover the cost of renting may have fallen across a number of regions, it certainly won’t feel like the challenge of renting has become any more affordable.
“Yes, an increase in earnings may have helped to an extent, but there are many who simply won’t have benefited from this increase.
“At the same time, the cost of renting has climbed across every region but one, putting further pressure on tenant finances.”
He added: “With the Government doing its best to deter landlords from the sector, a reduction in the level of available rental stock will have also helped to drive up the cost of renting and this is an issue that doesn’t look like it will be easing any time soon.”
The analysis highlights regional variations in rental affordability and London is still the least affordable region for renters, where they pay 35% of their income on rent.
But the capital has also seen the largest improvement in rental affordability compared to 2017, when renters paid 50% of their income on rent.
The improvement in London’s rental affordability is due to a combination of falling rents and rising incomes.
The average rent in London has decreased from £1,495 in 2017 to £1,450 in 2022, while the average income has increased from £2,975 to £4,155 per month over the same period.
Other regions that have seen a reduction in the rent-to-income ratio are the East of England (-4%), Yorkshire and the Humber (-2%), the North West (-1%), the South West (-1%), and the East Midlands (-1%).
These regions have also experienced higher income growth than rent growth.
Also, three regions have seen a worsening of rental affordability: the West Midlands (+5%), the South East (+4%), and the North East (+1%).
These regions have seen higher rent growth than income growth, possibly due to an influx of tenants moving to these regions in the past five years, shifting the balance of supply and demand.
