London rent surges to almost 75% of income as cost rises across UK
UK workers have a seen a steep rise in the share of their income needed to rent the average property in large parts of the country, according to a study.
The amount of net income required to cover the cost of renting has increased by 16.8% in the last two decades to 45.5% across the UK.
London has seen the most drastic increase, surging to 74.8% of the average income, a 33.7% rise in the last 20 years, the study by lettings and estate agent Benham and Reeves revealed.
Average London rents in 2020 are at £1,697 ($2,179) per month, almost 75% of average net monthly earnings which stand at £2,269.25.
However, the average rental figures are for the whole property, so earners would not be quite as squeezed if splitting costs or renting a single room or smaller property.
READ MORE: The London boroughs where property prices are rising fastest
The south-east is the second most expensive place to rent after London in terms of income to rent ratio, with rents costing 49.8% of monthly earnings, a rise of 18.6%.
The east of England has seen the second largest increase in the amount of income needed to cover rent in the last 20 years, rising to 45.5%, an increase of 18.7%.
In 2020 the north-east is the most affordable place to rent with average monthly rents of £533 amounting to 32% of average incomes. It is also the region that has seen the smallest increase in income to rent ratio in the last 20 years, at 7.4%.
This is a change from two decades ago when the East Midlands had the most favourable rent prices with with just 24% of earnings required for the average rent. Average monthly rent prices in the region now stand at £628, compared with £260.96 20 years ago.
READ MORE: The UK cities where property prices are rising fastest
The research points to high demand for rental properties over the last two decades driving up prices, along with wage growth “failing to keep pace” as the reason for the rise in the amount of income needed to cover rent across the UK.
Director of Benham and Reeves, Marc von Grundherr, 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 ... the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium.”