A prominent lettings agent says there’s been a definite improvement in rental affordability in most areas - but he doubts all tenants will benefit from it.
Benham and Reeves analysed government data measuring rents against income, revealing how rental affordability levels have changed across each region of England between 2017 and the latest figures, which apply to 2022.
Across England the average cost of renting currently sits at £795 per month according to the latest figures.
With the average earnings coming in at £3,050, this means the average renter is paying 26 per cent of their monthly income on the cost of renting. This proportion has remained unchanged when compared to 2017.
London remains the least affordable region of England for renters, where they are required to pay 35 per cent of their income on rent. However, the capital has seen rental affordability improve when compared to 2017.
Across the capital the cost of renting has fallen, from £1,495 in 2017 to £1,450 in 2022, while typical incomes have increased from £2,975 to £4,155 per month over the same timespan. As a result the current level of income required to cover the cost of renting has fallen from 50 per cent in 2017 to the 35 per cent required today.
It’s not just London that has seen a reduction in the level of income required to cover the average cost of renting.
In the East of England the proportion of income required to cover the average rent has reduced by four per cent as high incomes of £3,560 stood against typical rents of £865 per month.
Affordability also improved in Yorkshire and the Humber (down two per cent), while the North West, South West and East Midlands improved one per cent.
Tenant affordability has worsened in three regions, by five per cent in the West Midlands, four per cent in the South West, and one per cent in the North West.
Even after affordability became tougher for tenants, average incomes made up 29 per cent of rents in the West Midlands and the South West and 26 per cent in the North West - not far from the national average.
Marc von Grundherr, director of Benham and Reeves, says: “Rental market affordability has long been a problem for the nation’s renters and while the percentage of income required to cover the cost of renting may have fallen across a number of regions, it certainly won’t feel like the challenge of renting has become any more affordable.
“Yes, an increase in earnings may have helped to an extent, but there are many who simply won’t have benefited from this increase. At the same time, the cost of renting has climbed across every region but one, putting further pressure on tenant finances.
“With the government doing its best to deter landlords from the sector, a reduction in the level of available rental stock will have also helped to drive up the cost of renting and this is an issue that doesn’t look like it will be easing any time soon.”