The latest property market analysis by London lettings and estate agent, Benham and Reeves, has revealed how UK renters are forking out up to 77% of their monthly household income simply to get by in the UK rental market.
Benham and Reeves analysed the cost of living within the rental market across each area of the UK based on:
- The average monthly household income in each area
- The average cost of renting in each area
- The average cost of eight other essential household outgoings including food, clothing, utilities, medical costs, transport, education, communication and household goods and services.
- Benham and Reeves then looked at the combined cost of these household outgoings and what percentage of income was required to cover them on a monthly basis.
The research shows that the average UK rental household pays £808 per month in rent, accounting for 26% of total monthly household income. The average household then pays a further £1,138 per month for other essential outgoings associated with the home, such as food, clothing, utilities and transport, but excluding non-essential purchases such as alcohol or other miscellaneous goods.
When combining this cost of renting and living, the average UK household is forking out £1,946 each month, swallowing up 63% of total income.
Of course the percentage of income required to get by differs depending on where in the UK you are renting and while London’s rental market is notoriously expensive, the capital doesn’t rank top where the issue of overall affordability is concerned.
The research by Benham and Reeves shows that Northern Ireland is the least affordable place to rent in the UK. The average household rent of £703 per month combined with a wider cost of living of £1,103 sees the average rental household spend £1,806 per month to get by. This equates to 77% of household income, by far the highest in the UK.
The South West ranks second, where 73% of household income is required to cover the rental cost of living, with London ranking third as the only other area to see this cost exceed 70% of earnings (72%).
Wales is home to the most affordable rental market, with the combined cost of rent and other essential monthly outgoings totalling £1,559 and requiring 58% of a households monthly income.
Director of Benham and Reeves, Marc von Grundherr, commented: “Although we saw rents drop across many areas of the UK during the pandemic, they’ve once again started to climb as Covid restrictions have eased and tenants have headed back to the workplace. At the same time, inflation has caused the wider cost of living to increase considerably and this is putting additional pressure on the financial stability of those living within the rental sector.
“While London is notoriously expensive when it comes to renting, the higher earnings available in the capital mean that it’s not the worst area of the UK when it comes to the overall cost of renting in relation to household income.
“Of course, our research only considers the bare essentials in terms of household outgoings and so the reality is that many rental households will have an even smaller proportion of income left once they’ve accounted for the other costs associated with modern life.”