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Tenants spend nearly half of their salary on rent

Rents in England are almost half of tenants’ average take-home pay, according to a new report on the state of the country’s private rented sector 

Research undertaken by Benham and Reeves shows that tenants paid an average of 45.5% of their net income in rent, with those in London paying the highest proportion. 

According to the letting and sales agent, the cost of renting in the capital now accounts for 74.8% of the average salary in London, having increased by 33.7% since the turn of the millennium.

The research reveals that 20 years ago, the average rent accounted for 28.7% of the average income in England. This was unsurprisingly higher in London where 41.1% of income was required to cover rent, with the South East (31.2%) and South West (29.4%) also among some of the highest of all regions. 

Marc von Grundherr, director of Benham and Reeves, said: “There’s been plenty of positive changes to the rental market in the last 20 years with better codes of practice and improvements through technology allowing for a fairer, more transparent process for both landlords and tenants.  

“Unfortunately, the one thing this can’t address is the huge demand for rental properties and the resulting increase in the cost of renting as a result and with wage growth failing to keep pace, the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium.”

Rent as % of NET salary

Location

2000

2020

Increase (%)

England

28.7%

45.5%

16.8%

London

41.1%

74.8%

33.7%

South East

31.2%

49.8%

18.6%

South West

29.4%

47.9%

18.4%

East of England

26.8%

45.5%

18.7%

West Midlands

27.5%

38.2%

10.7%

Yorkshire and the Humber

24.8%

36.4%

11.6%

East Midlands

24.0%

36.3%

12.4%

North West

25.5%

35.7%

10.2%

North East

24.6%

32.0%

7.4%

Sorted by largest increase in the last two decades

  • icon

    But is that our fault, or is it down to the government ? the end user always pays.

  • icon

    buyers spend more than half salary on mortgage

    and insurance

    and repairs

    etc

  • Matthew Payne

    Most lenders allow up to a 35% net spend on a mortgage payment commitment. In my experience, these numbers look way too high. We strictly referenced all of our tenants and we wouldnt have let people move in commiting to paying 75% of their salary on the rent, way too risky for us and the landlord. Im not sure where the sample came from when Benhams are a London zones 1-3 agent, it must be a small or niche sample to arrive here.

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