Properties in London are now so expensive that couples looking for a family home pay more than half of their combined monthly salary to rent a typical three bedroom home, new research has found.
They would need to fork out 55.6% or £2,460 of their combined average monthly salary to rent an average property, some £29,520 in rent over a year, the analysis from property crowdfunding platform Property Partner shows.
The research looks at average monthly rental prices for one and two bed flats in London where there is a severe shortage of affordable properties to rent or buy and examines how much it would cost for an average three bed house in all 33 London boroughs.
Using the combined average net monthly earnings of a couple in London which is put at £4,417, the study looked at the proportion of salary that would be needed.
In Kensington and Chelsea, the least affordable borough to rent, an average one bed flat would cost tenants more than 59% or £2,634 of their combined net monthly earnings, twice the London average of £1,311 and that rises to 92% or £4,059 for a two bed flat, and 168% or £7,434 for a three bed house.
Westminster is the next least affordable borough in London with the rest of the top 10 most expensive made up of Camden, Tower Hamlets, Hammersmith and Fulham, Islington, Southwark, Hackney, Wandsworth and Lambeth.
Couples looking for a family home face high costs even in the more affordable outer London boroughs. To rent a two bed flat in Bexley, Havering, Sutton, Barking and Dagenham, Bromley, Croydon, and Redbridge would eat up less than 30% of a couple’s combined salary but for that price Bexley is the only option for a three bed home.
Hillingdon is the most affordable followed by Enfield, Waltham Forest, Redbridge, Croydon, Bromley, Barking and Dagenham, Sutton, Havering and Bexley.
Dan Gandesha, chief executive officer of Property Partner, explained that as demand for larger rental properties has grown finding affordable accommodation is increasingly difficult.
‘Those unable to buy but hoping to start a family and move up the rental ladder may just be able to make ends meet in outer London boroughs. But the harsh reality is that they’ll be forced to bring up their children in a flat rather than a house. Although everyone knows Kensington and Chelsea, and Westminster, are totally out of reach on an average London salary, the surprise comes with Camden and Islington too,’ he said.
‘The age of the so-called second-stepper renter has not arrived. In fact at this rate, it looks like it may never come. Even in the cheapest borough, Bexley, a couple would have to fork out £15,732 a year of their joint net income to pay the rent on a three bed home,’ he pointed out.