The latest property market analysis by London lettings and estate agent, Benham and Reeves, has revealed how UK renters are forking out up to 77% of their monthly household income simply to get by in the UK rental market.
Benham and Reeves analysed the cost of living within the rental market across each area of the UK based on: –
The average monthly household income in each area
The average cost of renting in each area
The average cost of eight other essential household outgoings including food, clothing, utilities, medical costs, transport, education, communication and household goods and services.
Benham and Reeves then looked at the combined cost of these household outgoings and what percentage of income was required to cover them on a monthly basis.
The research shows that the average UK rental household pays ÂŁ808 per month in rent, accounting for 26% of total monthly household income. The average household then pays a further ÂŁ1,138 per month for other essential outgoings associated with the home, such as food, clothing, utilities and transport, but excluding non-essential purchases such as alcohol or other miscellaneous goods.
When combining this cost of renting and living, the average UK household is forking out ÂŁ1,946 each month, swallowing up 63% of total income.
Of course the percentage of income required to get by differs depending on where in the UK you are renting and while London’s rental market is notoriously expensive, the capital doesn’t rank top where the issue of overall affordability is concerned.
The research by Benham and Reeves shows that Northern Ireland is the least affordable place to rent in the UK. The average household rent of ÂŁ703 per month combined with a wider cost of living of ÂŁ1,103 sees the average rental household spend ÂŁ1,806 per month to get by. This equates to 77% of household income, by far the highest in the UK.
The South West ranks second, where 73% of household income is required to cover the rental cost of living, with London ranking third as the only other area to see this cost exceed 70% of earnings (72%).
Wales is home to the most affordable rental market, with the combined cost of rent and other essential monthly outgoings totalling ÂŁ1,559 and requiring 58% of a households monthly income.
Director of Benham and Reeves, Marc von Grundherr, commented:
 “Although we saw rents drop across many areas of the UK during the pandemic, they’ve once again started to climb as Covid restrictions have eased and tenants have headed back to the workplace. At the same time, inflation has caused the wider cost of living to increase considerably and this is putting additional pressure on the financial stability of those living within the rental sector.
While London is notoriously expensive when it comes to renting, the higher earnings available in the capital mean that it’s not the worst area of the UK when it comes to the overall cost of renting in relation to household income.
Of course, our research only considers the bare essentials in terms of household outgoings and so the reality is that many rental households will have an even smaller proportion of income left once they’ve accounted for the other costs associated with modern life.”
Location
Average monthly household income
Average rent per month
Additional essential outgoings
Total monthly expenditure
Monthly expenditure as a % of household income
Northern Ireland
ÂŁ2,333
ÂŁ703
ÂŁ1,103
ÂŁ1,806
77%
South West
ÂŁ2,791
ÂŁ873
ÂŁ1,157
ÂŁ2,030
73%
London
ÂŁ3,919
ÂŁ1,597
ÂŁ1,243
ÂŁ2,840
72%
East Midlands
ÂŁ2,643
ÂŁ673
ÂŁ1,117
ÂŁ1,790
68%
West Midlands
ÂŁ2,619
ÂŁ709
ÂŁ1,030
ÂŁ1,739
66%
South East
ÂŁ3,599
ÂŁ1,024
ÂŁ1,348
ÂŁ2,372
66%
Yorkshire and the Humber
ÂŁ2,708
ÂŁ646
ÂŁ1,072
ÂŁ1,718
63%
East of England
ÂŁ3,381
ÂŁ930
ÂŁ1,191
ÂŁ2,121
63%
Scotland
ÂŁ2,914
ÂŁ768
ÂŁ1,032
ÂŁ1,800
62%
North East
ÂŁ2,534
ÂŁ572
ÂŁ988
ÂŁ1,560
62%
North West
ÂŁ2,900
ÂŁ658
ÂŁ1,062
ÂŁ1,720
59%
Wales
ÂŁ2,671
ÂŁ539
ÂŁ1,020
ÂŁ1,559
58%
UK
ÂŁ3,075
ÂŁ808
ÂŁ1,138
ÂŁ1,946
63%
Average monthly income sourced from the Office for National Statistics: Average household incomes, taxes and benefits by tenure type of all individuals, 2019 to 2020 by region. Household income was used in relation to other household outgoings to give a more accurate picture of what these costs were as a percentage of income, rather than individual income in relation to household outgoings that may be shared by more than one tenant. Average rental values sourced from the Office for National Statistics (England), Gov.wales (Wales), Gov.scot (Scotland) and nihe.gov.uk (Northern Ireland). Average costs for additional essential outgoings sourced from Office for National Statistics: Detailed household expenditure by countries and regions: Table A35
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About the Author
Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.