Households are spending an average 38% of their take-home income on rent, with those in London spending 71%, according to new figures from FindaProperty.com.
According to the property website’s latest Rental Index*, the average asking price for renting in the UK is now £868 per month – 1% up on the same time last year, but below the record high of £890 in September 2011.
At present, the average UK household has a net income of £27,242 a year, with those living in rented accommodation spending roughly 38% or £10,416 of this on rent.
This rises significantly for those living in London, where the average price for a rental property is 71% (£25,824) of the average London household’s net annual income of £36,384. The average rental household in London spends nearly as much (95%) on their rent in a year as the average UK household takes home.
Last year’s rental price increases appears to have come to an end for the time being with the slowdown driven by the steady or falling price of houses and larger flats. In contrast, the rental asking prices of studios and one and two bedroom flats are at an all-time high, creating a tough rental environment for tenants seeking smaller, more affordable accommodation.
Samantha Baden, property analyst at FindaProperty.com, said: “Average rental prices peaked in September of last year but have come down since then, most likely as a result of more properties coming onto the market.
“Overall, rental supply increased in the first quarter of the year, especially for bigger properties. In contrast, smaller homes remain in limited supply and as a result, individuals and couples are still facing record asking prices for smaller flats and therefore spending a significant proportion of their overall household income on this. This is particularly pertinent in areas like London where demand is high, which is why tenants looking for more affordable rental property should consider the impact of location as well as size.”