With London now at £1133 per month
The average cost of renting a one-bedroom home in Britain has risen to £746 per month – this is the equivalent of 48 per cent of the average post-tax income of a young full-time worker – back in 2007 it was only 45 per cent.
In London, predictably, the picture is much worse: the average cost of renting a one-bedroom home is £1,133 per month, which takes up 57 per cent of the average under 30’s post-tax income. In 2007 it was only 41 per cent.
The data comes from Countrywide which says that even if two young full-time workers split the rent of a two-bedroom home they would on average still spend 35 per cent of their post-tax income on rent in London and 27 per cent in Britain.
Even so, Countrywide says in most parts of the country, the proportion of income taken up by rent is less now than it was in 2007.
In the North East, the cost of a one-bedroom home accounts for 35 per cent of the post-tax income of an average full-time worker under 30, much lower than the 42 per cent in 2007. Tenants in the North East have benefitted from the highest regional income growth since 2007 (32 per cent), in addition to rents being only 11 per cent higher.
Overall, average rents in the UK rose to £945 in May, some two per cent higher than they were last year.
The pace of growth remains low compared to last year, claims Countrywide, when rents were growing at a rate of 5.5 per cent. Scotland and the North saw the highest year-on-year increase in rent, 12 per cent and four per cent respectively.
“In London rents have risen much faster than wages, stretching affordability. Many tenants have adapted to rising prices by either moving to cheaper areas, further from the centre, or sharing. Stalling rental growth in the capital begs the question whether London’s rents have reached their affordability limits for now” says Johnny Morris, research director at Countrywide.