The latest data on the cost of renting from the Office for National Statistics was released last week showing that rents in England have increased to their highest level on record.
While the average rent in London is double that of the national average, the latest research by lettings and estate agent Barrows and Forrester has found that London isn’t the least affordable rental market when it comes to rent as a percentage of income.
Based on the latest data, their research shows that the average UK tenant is spending 47% of their monthly net income (£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.
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.
Managing Director of Barrows and Forrester, James Forrester, commented:
“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.
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.”