Rents for one-bedroom properties are more affordable today than in 2007 in most areas of the UK, according to research by estate agent Countrywide. But London's renters are harder-pressed than ever.
Countrywide said in its lettings index for May that the average UK rent on a one-bedroom property hit £746 a month, up 1.9% over the year, or 48% of the average post-tax income of an under-30 full-time worker. In 2007, this was 45%. But broken down by region of the UK, in six out of 11 areas rents as a portion of income are lower in 2016 than in 2007.
In London, where there is an acute property shortage, rents have risen sharply over the same period. Countrywide said the average rent on a one-bed in London hit £1,133, or 57% of a young worker's income. This is up from 41% in 2007. But the year-on-year rise in rent was just 0.3%.
"In most parts of Great Britain, rising incomes have softened the impact of increasing rents," said Johnny Morris, research director at Countrywide. "But in London rents have risen much faster than wages, stretching affordability. Many tenants have adapted to rising prices by either moving to cheaper areas, further from the centre, or sharing. Stalling rental growth in the capital begs the question whether London's rents have reached their affordability limits for now."
City Hall estimates that 50,000 new homes are needed a year to meet demand in London. But just half of that figure is currently being achieved as a construction skills shortage, strict planning rules, and the high cost of land hold back housebuilding work.
"The outrageous cost of rent means most young Londoners are struggling to make ends meet every month," said Sian Berry, a Green member of the London Assembly. "How can young people build a bright future for themselves and our city if nearly 60% of their income is spent on rent? ... London's 2.3 million private renters, like myself, need protection from greedy landlords and letting agents."
Rents as a portion of post-tax income: (one bedroom, full-time workers under-30)
|Yorkshire & The Humber||38%||41%|
Rents for all types of residential property
|Region||Ave Rent May-16||Ave Rent Apr-16||Ave Rent May-15||May Rent YOY|
|East of England||£881||£878||£834||5.60%|