An estimated 60.2% of the average net monthly earnings are required to cover the average rent in the capital, according to research from Benham and Reeves.
This is down from the pre-pandemic figure of 64.4%, which Benham and Reeves believes is due to support from the furlough scheme.
This trend has been seen across 23 of the capital’s boroughs, and in some cases the reduction has been far greater.
In Camden, the average tenant was required to spend 74.5% of their income on the cost of renting prior to the pandemic; today, this rental cost requirement has fallen by 12.1 percentage points and sits at 62.4%.
Lewisham (7.1%), Kingston upon Thames (6.8%), Hammersmith and Fulham (4.5%), also rank amongst the boroughs to have seen the biggest reductions in the percentage of net income required to cover rent.
However, in Islington the average tenant is now spending 65.7% of their net monthly income on the cost of renting, a 5.7% increase since the start of the pandemic.
Haringey has also seen a sharp uplift, with 5.1% more of the average net income now required to cover the average rent.
Tenants in Wandsworth, Sutton, Greenwich and Tower Hamlets are now paying between 1% and 2% more of their income on rent.
Richmond, Lambeth and Southwark have seen the rent to income ratio remain largely unchanged.
Marc von Grundherr, director of Benham and Reeves, said: “The pandemic has caused a large degree of financial instability for tenants and landlords alike and so the last two years have been far from smooth sailing for those within the London rental sector.
“However, one silver lining to the ongoing uncertainty caused by COVID-19 does seem to be an increase in rental affordability across much of the capital.
“This has come about due to two driving factors. The first being a drop in demand which has caused many landlords to slash rents in order to secure a tenant and recoup some form of rental income.
“The second has been the ongoing financial support of the furlough scheme which has made the difference between retaining employment and losing it for a great deal of people.
“As a result, they’ve been able to maintain some form of income, albeit at a lower level, and this has enabled them to cover the cost of renting.
“As it stands, the cost of renting is more manageable now than it was two years ago and so those returning to the capital should be able to secure a decent rate of rent for the duration of their initial tenancy.
“Of course, as we do return to normality, this growing demand is likely to bring rental prices back to their pre-pandemic highs and so any tenants with intentions of snagging a deal should act sooner rather than later.”