A deposit alternative service claims the cost of rent has outpaced salary growth by 5.2% over the past 10 years, leaving renters significantly worse-off.

Using government figures, Zero Deposit has analysed the changing cost of rent in England between 2014 and 2023 and compared it to the changing average salary.

The average price of rent in England has grown from £742 a month in 2014 to £994 in 2023. This marks an increase of £252 per month or £3,024 per year. In percentage terms, this is a decade increase of 34%. 

Meanwhile, the average annual salary in England has grown from £27,919 in 2014 to £35,955 in 2023. This is a cash increase of £8,036 over a decade, equivalent to 28.8%. 

However, Zero Deposit appears not to have factored inflation rates into the equation, nor the increased costs faced by agents and landlords due to changing regulations surrounding the private rental sector.

Sam Reynolds, chief executive of Zero Deposit, says: “With rent prices rising at a faster rate than earnings, the issue of rental affordability is only getting worse. This means tenants are under increasing financial pressure in day-to-day life, but also means that the ability for them to put money aside is dwindling. In turn, this means that any aspirations for home ownership are served a significant blow as people have less opportunity to save for a mortgage deposit. 

“Unfortunately there is very little being done to address the issue and urgent action is needed if we’re to improve rental market affordability.”

His company says that a regional analysis of the same data points and across the same 10-year timeframe shows that renters in some regions of England have seen rent prices outstrip salary increases at an even greater rate.

In the East of England, the average salary has grown by 27% since 2014 while the price of rent has grown by 43.1%, meaning renters in the regions are now 16.1% worse off than they were ten years ago.

In the South West, the gap between rent and salary has widened by 9.7% while the East Midlands (9.6%), South East (9%), North West (6.9%), and West Midlands (3.3%). 

There were three regions in which salary growth outperformed rent values over the decade. 

In London, the average salary has increased by 29.8% since 2014, while the price of rent has grown by 22.4%, meaning renters in the capital are, in theory, 7.4% better off today than they were a decade ago.

In Yorkshire & Humber, renters are 1.4% better off, while in the North East, salaries have outgrown rent increases by 1.1%.

All of this means that the proportion of income that is spent on rent in England has increased from 31.9% in 2014 to 33.2% in 2023; an increase of 1.3%.