Agency spares a thought for tenants’ affordability problems

A lettings agency says renters must pay an average of up to 77 per cent of their monthly household income to get into the private rental market and still lead a basic life with essential products and services.

Benham and Reeves analysed the cost of living within the rental market across each area of the UK based on average monthly household income,  average cost of renting, plus the typical costs of eight other essential household outgoings.

These eight include food, clothing, utilities and transport but excluded non-essential purchases such as alcohol or other miscellaneous goods. 

It then looked at the combined cost of these household outgoings and what percentage of income was required to cover them on a monthly basis. 

The research shows that the average UK rental household pays £808 per month in rent, accounting for 26 per cent of total monthly household income. 

The average household then pays a further £1,138 per month for other essential outgoings associated with the home, such as food, clothing, utilities and transport, but excluding non-essential purchases such as alcohol or other miscellaneous goods. 

When combining this cost of renting and living, the average UK household is forking out £1,946 each month, swallowing up 63 per cent of total income. 

The research by Benham and Reeves shows that Northern Ireland is the least affordable place to rent in the UK. 

The average household rent of £703 per month combined with a wider cost of living of £1,103 sees the average rental household spend £1,806 per month to get by. This equates to 77 per cent of household income, by far the highest in the UK. 

The South West ranks second, where 73 per cent of household income is required to cover the rental cost of living, with London ranking third on 72 per cent. 

Wales is home to the most affordable rental market, with the combined cost of rent and other essential monthly outgoings totalling £1,559 and requiring 58 per cent of a household’s monthly income. 

The agency’s director, Marc von Grundherr, says: “Although we saw rents drop across many areas of the UK during the pandemic, they’ve once again started to climb as Covid restrictions have eased and tenants have headed back to the workplace. 

“At the same time, inflation has caused the wider cost of living to increase considerably and this is putting additional pressure on the financial stability of those living within the rental sector. 

“While London is notoriously expensive when it comes to renting, the higher earnings available in the capital mean that it’s not the worst area of the UK when it comes to the overall cost of renting in relation to household income. 

“Our research only considers the bare essentials in terms of household outgoings and so the reality is that many rental households will have an even smaller proportion of income left once they’ve accounted for the other costs associated with modern life.”