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The percentage of income required to rent property in England has soared over the last twenty years to as much as 75 per cent.
Research by lettings and sales agent, Benham and Reeves, has revealed that 20 years ago, the average rent accounted for 28.7 per cent of the average income in England. This was, of course, higher in London where 41.1 per cent of income was required to cover rent, with the South East (31.2 per cent) and South West (29.4 per cent) also amongst some of the highest of all regions.
However, today the proportion of income required to cover the cost of renting has increased by +16.8 per cent across England to 45.5 per cent.
Again, London has seen the most drastic increase with an eye-watering 74.8 per cent of the average income now required to cover the average cost of renting – a +33.7 per cent increase in the last 20 years.
The East of England has seen the second largest increase in that time, up +18.7 per cent , while the South East has seen the third largest increase (+18.6 per cent) and is currently home to the second largest income to rent ratio at 49.8 per cent.
20 years ago, the East Midlands was home to the lowest income to rent ratio with 24 per cent of earnings required for the average rent, today the North East is home to the most favourable ratio at 32 per cent and has also seen the smallest increase in the last 20 years (7.4 per cent).
Director of Benham and Reeves, Marc von Grundherr, commented: ‘There’s been plenty of positive changes to the rental market in the last 20 years with better codes of practice and improvements through technology allowing for a fairer, more transparent process for both landlords and tenants.
‘Unfortunately, the one thing this can’t address is the huge demand for rental properties and the resulting increase in the cost of renting as a result and with wage growth failing to keep pace, the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium.’