Graduates sharing in London spend upwards of 45 per cent of their monthly take home pay on accommodation according to a survey by specialist lender LandBay, while those living alone could spend almost 75 per cent of their pay on rent.
The lender says London is home to a quarter of all new graduates who move within six months of finishing their degree.
However, those hoping to live alone face spending 73 per cent of a London graduate’s average post-tax income of £1,9721 on £1,445 of rent. In a shared house of two people, overall rent of £1,917 adds up to 49 per cent of each tenant’s income, while those co-habiting in a three-bed property would each spend 45 per cent of their monthly take home pay on rent of £2,683.
Of the individual London boroughs, the most affordable average residential rents of properties are found in Bexley (£1,004), Sutton (£1,506), Havering (£1,072), Croydon (£1,125) and Bromley (£1,169).
Bexley has seen the strongest rental growth of all the boroughs with a 1.98 per cent rise in average rents over the last year. A growing demand for property in outer London has clearly already impacted these outer regions.
For those seeking greater proximity to the city and with the coveted London postcode, Lewisham is the most viable option. Average rental prices of £1,232 make it the eighth most affordable London borough, also being just 15 minutes via train from the City of London.
At the other end of the spectrum, the most expensive average rents are unsurprisingly found in the traditionally ‘desirable’ regions.
Kensington & Chelsea (£3,042), Westminster (£2,891), Camden (£2,219), City of London (£2,074) and Hammersmith & Fulham (£1,886) were found to be the most expensive boroughs to rent in with prices being well out of reach for those on a starting salary.
All five have seen rents fall over the last year by between one and three per cent.
“Faced with record high student debt levels and the rising cost of living, it will be little surprise to see graduates starting to look elsewhere from the traditional young professional hot spots such as Fulham and Camden when they come to London. Surrounding areas are clearly worth the longer commute to reduce the rent burden and give them any hope of saving for a deposit on a house of their own one day” explains Landbay founder and chief executive John Goodall.