According to the latest analysis by London lettings and estate agent Benham and Reeves, London has experienced the most significant improvement in rental affordability over the past five years, despite remaining the least affordable city for renters in England. This finding emerges from an analysis of ONS data comparing rents to income across different English regions from 2017 to 2022.
The study shows that across England, the average rent is £795 per month, and with average earnings at £3,050, renters are spending 26% of their monthly income on rent. Notably, this proportion has remained consistent since 2017, offering a glimmer of stability in rental market affordability.
In London, the percentage of income spent on rent has decreased from 50% in 2017 to 35% in 2022. This improvement is attributed to a reduction in average rent from £1,495 to £1,450, coupled with an increase in average monthly income from £2,975 to £4,155.
Other regions showing improved rental affordability include the East of England, where the income proportion required for rent dropped by 4%, and Yorkshire and the Humber, the North West, South West, and East Midlands, each seeing a 1-2% reduction.
However, rental affordability has worsened in some areas. The West Midlands, South West, and North West experienced increases in the proportion of income needed for rent, although these areas still remain close to the national average.
Marc von Grundherr, Director of Benham and Reeves, reflects on these findings: “Rental market affordability has long been a problem for the nation’s renters and while the percentage of income required to cover the cost of renting may have fallen across a number of regions, it certainly won’t feel like the challenge of renting has become any more affordable.”
He adds, “Yes, an increase in earnings may have helped to an extent, but many have not benefited from this increase. Furthermore, with the cost of renting climbing in almost every region and the Government’s policies deterring landlords, the pressure on tenant finances is increasing. This reduction in available rental stock is driving up renting costs, a trend that shows no sign of easing.”