NOVEMBER 09, 2018 | BY A & S Property
Tenants spend a third of their gross pay on rent
Tenants typically spend a third of their monthly salary before tax on rent, new figures show, but there are wide regional variations.
They currently pay an average of 33% of their gross salary to their landlord in the UK, when excluding London, according to the latest Landbay Rental Index.
Renters in the UK - excluding London - earning a typical monthly salary of £2,317, before tax, are paying out £769 a month for the average rental property in the UK.
But a closer look at the data revels that affordability is improving across the board, thanks to the fact that wage growth has outstripped rental growth in all regions of the UK.
In the year, average rental growth in the UK - excluding London - has increased by 1.25%, meaning tenants are paying £120 per year more. However, monthly gross pay has improved by £768 per year, leaving tenants £648 better off.
The index, powered by MIAC, reveals that the picture unsurprisingly varies across the country, with tenants in London paying as much as 61% of their gross salary on rent for the average rental property. For a one-bedroom property this drops to 47%.
Tenants in the South East of England and East of England also paid more of their gross salary on rent than the average across the UK, at an average of 42% and 38% respectively.
Regions with lowest proportion of money being spent on rent include the North East (25%), Yorkshire & Humberside (26%) and North West (27%).
John Goodall, CEO and founder of Landbay said: “Improved affordability is welcome news for renters. For tenants looking to save up for a house, the prospect of having more money in their pocket each month will help them get one step closer to owning their own home. Wage growth is continuing to improve across the UK so the outlook for tenants can only get better.
“Brokers can use this data to help clients to look for opportunities across the UK where higher wage growth will boost demand for properties.”
Landbay Rental Index, powered by MIAC: Countries (All Beds)
Landbay Rental Index, powered by MIAC: Regions (All Beds)
Landbay Rental Index, powered by MIAC: Countries by number of beds
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