x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

The proportion of income spent on rent drops despite increases in rental level

Despite increased rent prices, the proportion of income spent by tenants on rent decreased between 2016 and 2019, according to The Deposit Protection Service (DPS).

Its latest rent index revealed that the average proportion of wages spent on rent dropped from 32.64% in 2016 to 30.64% in 2019.

The DPS said that various factors had helped improve the affordability of renting during the period, including a 2.69% increase in average salary, from £29,559 to £30,353, and a £77 decrease in average tenancy deposits, from £905 per calendar month (pcm) to £828pcm since the introduction of the tenancy deposit cap in June last year.

Matt Trevett, managing director of The DPS, commented: “Although rents have risen over the past decade, other changes since 2016 have helped ensure renting has become on average more affordable.

“Predictions that rents would rise in response to the introduction of the tenant fees ban and deposit cap do not seem to have materialised, with many landlords seemingly declining to increase rents since last summer.”

The proportion of income spent on rent drops despite increases in rental level

The latest DPS Rent Index, published quarterly, also showed that average rents hit a peak of £777pcm during the third quarter of 2019, before dropping slightly by £4 to £773pcm during the last quarter.

Northern Ireland saw the greatest increase in average monthly rents, at an average of 3.01%, from £532pcm to £548pcm during Q4 2019, while average monthly rent in Yorkshire and The Humber decreased the most, from £551pcm to £524pcm, down 4.9%.                                                                                                              

Unsurprisingly, London remains the most expensive rental region in the UK, with average monthly rents standing at £1,345pcm in Q4 2019 – over two and a half times the £518pcm paid in the UK’s cheapest region, the North East, during the same period.

Excluding London, average monthly rent during the last quarter of 2019 stood at £672pcm.

Paul Fryers, managing director at specialist buy-to-let mortgage provider Zephyr Homeloans, which like The DPS forms part of the Computershare Group, said:  “Although the longer-term recovery in rental levels is likely owing to broader economic factors, changes to rental figures are also more likely at moments where property changes hands.

“Over the last couple of years, professional landlords have become a larger proportion of the buy-to-let market as more and more smaller or ‘accidental’ landlords sell up, partly as a result of increasing costs.”

 

Rent as % of wages in 2019

Average Salary 2019

Average Rent 2019

UK

30.64%

£30, 353

£769

London

40.97%

£38,992

£1,321

SouthEast

32.83%

£32,120

£872

SouthWest

31.10%

£28, 654

£737

East

32.40%

£30,345

£813

East Midlands

25.09%

£28,000

£581

West Midlands

26.27%

£28,536

£620

Yorkshire

23.24%

£27,835

£535

North West

25.49%

£28,137

£593

North East

23.13%

£27,187

£520

Scotland

24.67%

£30,000

£612

Wales

25.68%

£27,500

£584

N. Ireland

23.45%

£27,434

£532

  • icon

    Opposite was claimed just last week!

    Matthew Payne

    Those numbers from Benham and Reeves were wrong, these look more in keeping with what lenders and referencing agents will allow. Anything much over 30-35% is too high. I can see London might get to 40% as there is a hard deck on studios and small one beds that will force up any average.

     
icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up