75% of income required to rent in parts of England – here’s how it’s changed in the last 20 years

The latest research by lettings and sales agent, Benham and Reeves, has revealed the amount of net income required to cover the cost of renting has increased +16.8% in the last two decades to 45.5% nationally, now accounting for 74.8% of the average salary in London having jumped +33.7% since the turn of the millennium.

The research shows that 20 years ago, the average rent accounted for 28.7% of the average income in England. This was of course higher in London where 41.1% of income was required to cover rent, with the South East (31.2%) and South West (29.4%) also amongst some of the highest of all regions.

Today, the proportion of income required to cover the cost of renting has increased by +16.8% across England to 45.5%.

Again, London has seen the most drastic increase with an eye-watering 74.8% of the average income now required to cover the average cost of renting – a +33.7% increase in the last 20 years.

The East of England has seen the second largest increase in that time, up +18.7% , while the South East has seen the third largest increase (+18.6%) and is currently home to the second largest income to rent ratio at 49.8%.

20 years ago, the East Midlands was home to the lowest income to rent ratio with 24% of earnings required for the average rent, today the North East is home to the most favourable ratio at 32% and has also seen the smallest increase in the last 20 years (7.4%).

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.”

Rent as % of NET salary
Location 2000 2020 Increase (%)
England 28.7% 45.5% 16.8%
London 41.1% 74.8% 33.7%
South East 31.2% 49.8% 18.6%
South West 29.4% 47.9% 18.4%
East of England 26.8% 45.5% 18.7%
West Midlands 27.5% 38.2% 10.7%
Yorkshire and the Humber 24.8% 36.4% 11.6%
East Midlands 24.0% 36.3% 12.4%
North West 25.5% 35.7% 10.2%
North East 24.6% 32.0% 7.4%
Sorted by largest increase in the last two decades
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About the Author

A board director since 2001, Marc oversees the company’s London rentals operation as well as marketing and developing strategies for new business. He has been instrumental in the company’s expansion, working closely with managing director Anita Mehra to develop its core services and frequently co-hosts property seminars for investors in many international locations. Read more about Marc von Grundherr here - Read full profile

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