First Time Buyer
Rent costs three-quarters of average income in London
A staggering 75% of income is now required to rent in London.
Renting now accounts for 74.8% of the average salary in the capital, having jumped 33.7% since the turn of the millennium, according to research from Benham and Reeves.
The lettings agent found that, nationally, 45.5% of income is required to cover the cost of renting – up 16.8% over the last 20 years.
The East of England has seen the second largest increase in that time, up 18.7%, while the South East has seen the third largest increase (18.6%) and currently has the second largest income to rent ratio at 49.8%.
The North East is the most affordable region to rent in, with costs totalling 32% of income. It’s also seen the smallest increase in the last 20 years (7.4%).
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 with wage growth failing to keep pace, the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium.”