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TODAY'S OTHER NEWS

Misery for tenants as cost of renting continues ‘to climb across the UK’

The average tenant in the UK is spending almost half of their monthly net income to cover the average cost of rent, new research shows. 

The latest figures on the cost of renting from the Office for National Statistics (ONS) was released earlier this month showing that rents in England have increased to their highest level on record.

Based on the latest data, research reveals that the average tenant in the UK is spending 47% of their monthly net income of £2,039 to cover the average cost of £959 in rent.

At a regional UK level, tenants in London are paying the most, with 62% of the average London salary required to cover the monthly cost of renting. In contrast, tenants in Wales and the South East are paying less than half that (30%).

However, when breaking the UK down on a local level London takes a back seat to Oxford where the issue of rental affordability is concerned.

With a monthly net salary of £1,946 and rental costs coming in at an average of £1,588 per month, tenants in Oxford are spending 82% of their monthly income on renting.

James Forrester, managing director of Barrows and Forrester, which carried out the study, said: “The latest figures show that the cost of renting has continued to climb across the UK. This will put even further pressure on tenants who have largely seen the income available to them fail to keep pace with this growth.

“While London remains the most expensive part of the rental market where outright cost is concerned, rental affordability is relative to income and in this respect, Oxford is the worst place to be a tenant at the moment.”

Location

Average rent (pm)

Net salary (pm)

Rent as % of net salary

London

£1,644

£2,639

62%

South East

£999

£2,251

44%

South West

£818

£1,866

44%

East of England

£862

£2,124

41%

Scotland

£748

£1,944

38%

West Midlands

£671

£1,894

35%

Northern Ireland

£627

£1,798

35%

East Midlands

£639

£1,884

34%

Yorkshire and the Humber

£614

£1,831

34%

North West

£629

£1,885

33%

North East

£542

£1,799

30%

Wales

£539

£1,792

30%

United Kingdom

£959

£2,039

47%

There are a further 17 areas of the UK where the average rent accounts for 60% or more of the average monthly income, with the capital accounting for 14 of these least affordable rental markets.

Hackney is the least affordable of all London boroughs and second least affordable behind Oxford, with 78% of the average income spent on rent.  

Outside of London, Exeter (67%) Brighton and Hove (66%) and Epping Forest (60%) also make the list of least affordable rental markets.  

Forrester added: “A string of government changes to the buy-to-let sector has dampened the financial return for many landlords in an attempt to address wider issues within the property market. Unfortunately, the knock-on effect of this is that a number of landlords have left the rental space, reducing the stock available to tenants and increasing rents even further.

“We need to reverse this trend in order to meet the high demand for rental properties if we are to attempt to reduce rental prices.”

Least affordable rental markets

Location

Average rent (pm)

Net salary (pm)

Rent as % of net salary

Oxford

£1,588

£1,946

82%

Hackney

£1,842

£2,360

78%

Westminster

£3,046

£4,038

75%

Lambeth

£1,908

£2,565

74%

Newham

£1,453

£2,007

72%

Haringey

£1,669

£2,350

71%

Camden

£2,302

£3,387

68%

Brent

£1,502

£2,217

68%

Exeter

£1,201

£1,801

67%

Barking and Dagenham

£1,208

£1,816

67%

Brighton and Hove

£1,360

£2,054

66%

Hammersmith and Fulham

£2,117

£3,209

66%

Ealing

£1,569

£2,431

65%

Southwark

£1,718

£2,717

63%

Islington

£2,003

£3,195

63%

Enfield

£1,292

£2,114.96

61%

Epping Forest

£1,369

£2,261.61

61%

Barnet

£1,499

£2,498.08

60%

Least affordable rental markets excluding London

Location

Average rent (pm)

Net salary (pm)

Rent as % of net salary

Oxford

£1,588

£1,946

82%

Exeter

£1,201

£1,801

67%

Brighton and Hove

£1,360

£2,054

66%

Epping Forest

£1,369

£2,262

61%

Bath and North East Somerset

£1,223

£2,050

60%

Bristol

£1,175

£1,974

60%

Midlothian

£1,084

£1,887

57%

Cambridge

£1,250

£2,186

57%

East Lothian

£1,084

£1,949

56%

Three Rivers

£1,280

£2,347

55%

Mole Valley

£1,268

£2,327

54%

West Oxfordshire

£1,108

£2,038

54%

Harlow

£1,006

£1,853

54%

Crawley

£1,004

£1,856

54%

Chiltern

£1,455

£2,744

53%

  • icon

    Just think all these percentages would be lower if Gov & local gov didn't interfere with badly thought out legislation in this sector. I'm seriously thinking of renaming my business to "We Just Pass It On Ltd"

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    Agreed, same as all business have to do.

     
  • David Lester

    Government to blame and it will only increase, they must realise that we are a business, not a Charity!

  • SCN Lettings

    Government bowing to the will of the liberal left marxist landlord hating Notting Hill set who own one million pound flats and houses and think landlords are lowest of the low. Just watch for Generation Rent's Dan Wilson Craw crowing about the increase and demanding rent caps. Between them Shelter and Generation Rent have done more to lobby for anti- landlord policies driving LLs out of the market than anybody else. Then they moan about rent increases. Have they never heard of the law of supply and demand?

  • icon

    govt should allow rent and mortgage payments to be tax allowable?

  • PossessionFriendUK PossessionFriend

    Jahan is absolutely right. - almost EVERTHING the Govt has doe to the PRS ( and mostly exclusively to the PRS, leaving out Social or Council Housing from their pernicious legislation - treatment ) has resulted in rent increases.
    And Government have the audacity to point the finger at the PRS ? !

  • icon

    Since when were renting a room these rates in this report??? The rental rates are inflated here and certainly don’t reflect room rates in any of these places. A double room in bristol with an ensuite is around £550-£600 on average and for a couple is around £700 (£350 each) so how does the report show £1175 per person??? Again scaremongering reporting and totally untrue. No wonder with articles flying around like this politicians might read and be against landlords! How have they done this survey??

  • icon

    I don't see the problem. All tenants should be credit scored and if they are unable to afford the rent then they must choose something less costly. This will stop them complaining that they are unable to afford the rent and the problem of complaints just go away. Rent times 30 gives a reasonable income figure required to be able to afford the rent figure used.

    This report quotes average rent and then proceeds to pluck a figure out of the air to show an income but NOT what the income is based on.

    Seems to me this bunch are putting fictitious figures together to show what they want you to see but not what the true figures really are.

    "With a monthly net salary of £1,946 and rental costs coming in at an average of £1,588 per month, tenants in Oxford are spending 82% of their monthly income on renting." This statement is a load of B.S. Those who can afford the Oxford rent must clearly be earning enough to pay for it. Those who can't must be at the lower end of the market and conveniently ignored to twist the figures to look as they do.

    Or am I missing something?

  • icon

    Landlords don't increase rents,government does !
    Landlords have no option but to cover their costs,this is called business !
    The government needs to stop bashing (good) landlords. They need to class all BTL as a business and allow all expenses,including rent and interest.
    They could abolish stamp duty,so landlords can supply and invest in more properties to house all the people this government can't ! wake up government support the good guys.
    I pay too much tax(I feel) from my own efforts,hard work,savings,giving up on holidays(not had one for over 30 years!) Am just waiting now for the next cost we all have and the next rent increase to cover it !!!!!!!!!!!!!!!!! We need in Landlord or two in government that understand the business.
    Unless you are LTD you are NOT classed as a business,time this was changed BORIS !!!!!!!!!!!!!!!

  • icon
    • E T
    • 29 June 2020 10:44 AM

    SO much I want to say about this - but what's the point.
    All good Landlords know the position, bad landlords don't care, that awful so-called charity that causes more harm than good jumps up and down throwing a hissy fit tarring everyone with the same bad-brush so the government punish those that are trying to do the right thing. The bad landlords still don't care so carry on as they were, but more and more good landlords are leaving the sector because business is untenable... yes I can see how this is going to help!

  • Paul Barrett

    I'm afraid like it or not Govt intends to use LL as social housing until the LL gives up.

    They know that LL will do almost anything to retain possession of their properties.

    But I believe a tipping point has already been reached.

    It will take time for LL to sell up.
    It will take me 4 tax years to sell up which is my intention.
    There will be a steady decline in the numbers of rental stock though I believe LL numbers will remain roughly the same.
    Just many LL will downsize their portfolios to unencumbered properties.

    This will ensure financial resilience for the next pandemic situation.
    At least no chance of being repossessed by a lender for mortgage payment defaulting!!

    If only Govt would allow IO mortgages with no repayment vehicle required and mortgages til age 90 the market would take off.
    LL could then sell off into what would be a highly liquid market

    But of course Govt wants mortgages to be paid off so that when care home fees need to be paid the Council can force the sale and rob the equity value
    Whereas all the feckless waster tenants will have theirs all paid for by the Council.

    Doing this would potentially facilitate tenants to be able to buy.
    IO mortgages are key to the ability of OO to buy.

    Govt shouldn't concern itself with the market 40 years from now.
    Most in Govt will be dead by then.

    MMR is very effectively preventing aspirant OO from buying.
    If LL can have IO mortgages with no repayment vehicle then so should aspirant OO.
    After all both would tend to repay mortgage debt by selling the property.

    OO to downsize and LL to liquidate business assets to leave the PRS.

    Perhaps the MMR should be adjusted to allow IO mortgages but with a 25% required deposit.
    So basically the same mortgage terms as LL have.
    Level playing field then!!


  • Suzy OShea

    Elizabeth beckett,

    Totally agree with your comments!

    This is a worthless study without having classified types of property researched.

    Every political party should learn if you mess with the market, it will bite the tenants because scarcity always raises prices!

    But rents in many parts of London have been falling since the lock down! So this study just spreads lies.

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