The average UK rent outside London is now £761, with London’s average being £1,879 - meaning tenants across the country now spend over half their disposable income on rent.
Average rent outside London account for 52 per cent of the average disposable income of £1,471 for those living outside of the capital; meanwhile in London almost 89 per cent of disposable income is spent on rent, now standing at an average of £1,879 per month.
Data from specialist lender Landbay show that if London workers are willing to move further afield to save money, they can expect to spend a far lower percentage of their disposable income on rent.
Average rents in the South East now stand at £1,053, which is 58 per cent of the average disposable income of £1,817 of those living in the region, whilst another option is East England, where average rents are 55 per cent of take-home pay.
On the other end of the spectrum, those working and living in North East see the lowest percentage of their salary going towards rent, where just 41 per cent of the average disposable income of £1,350 is handed over to the landlord each month.
“Rents have continued to rise over the last five years, increasing by nine per cent across the UK since March 2013 and by seven per cent in London” says John Goodall, chief executive and founder of Landbay.
“There has been much speculation about the long-term future of the buy to let sector from an investment perspective, however, demand remains strong as brokers would attest. Not a day goes by when there isn’t more news about the supply-demand mismatch in the UK housing sector and until this is resolved, tenants will continue to rely on the private rented sector to support them. With the right property and the right location, there are attractive yields to be had, and consistent rental demand will drive returns in the long-term” he adds.
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QE and ZIRP have forced up asset values (house prices) to crazy levels where a great number of people can't afford to buy. Government then compounds the issue with Help To Buy. And then to really screw people further it introduces a raft of measures to force up rents, such as S24, extra 3% SDLT, removal of W&T allowance, prospective banning of application fees...... and the madness goes on.
Government continues to rely on the big builders to solve the housing crisis that they it has caused, when it is not what the companies are set up to do. Their job is to maximise profit for their shareholders, indeed they can be legally held accountable for it. One of the major builders is already reporting a fall-off in sales due to landlords restricted appetite due to Government punitive policies. Surely more will follow.
And Government continues to follow the same old route expecting a different result when history shows the way to deal with the mess. Why have Development Corporations still not been recreated to deal with the issues. Their successes are on record but Downing St has fingers in ears, eyes shut and happily singling la la la to itself.
I'm guessing these stats were produced on private lets as the majority of referencing agencies used by letting agents wouldn't allow the rent to exceed approximately 40% of income. Slightly distorted statistics I think
I'm guessing these stats were produced on private lets as the majority of referencing agencies used by letting agents wouldn't allow the rent to exceed approximately 40% of income. Slightly distorted statistics I think
What is crazy is that the majority of tenants are not reporting this rent. This is their biggest expense! At CreditLadder from our working with Experian we see very low arrears numbers compared with the national average. When tenants report their rent either directly to us or via their agent they typically pay on time. It's about time more tenants took this route and the earlier the better. After receiving HM Treasury backing we'll be campaigning to get more tenants reporting.
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