London rent affordability improves thanks to strong wage growth

The latest research by London lettings and estate agent, Benham and Reeves, reveals that the average London renter is spending 50% of their income on rent each month. However, the good news is that strong wage growth in the Capital means that this proportion has actually reduced since 2024.

Benham and Reeves has analysed average monthly earnings* as a proportion of average monthly rent in London to understand how much of their income tenants are now spending on rent.

The analysis reveals that across London, the average monthly earnings stand at £4,586, while the average monthly rent is £2,268. This means that Londoners are spending 49.5% of income on rent.

This proportion climbs as high as 60.6% in Hackney, where average earnings of £4,253 meet an average rent of £2,578.

In Haringey, rent costs 58.7% of earnings each month, followed by Barking & Dagenham (56.8%), Ealing (54.6%), Hounslow (53.3%), Brent (53.1%), Newham (52.1%), Southwark (50.3%), Enfield (49.8%), and Lambeth (48.1%).

However, the good news for London renters is that rent as a proportion of income has actually reduced since 2024.

London-wide, the proportion has fallen by -2.3%, but a number of boroughs have seen significantly bigger drops.

In Wandsworth, a significant boost to salaries since 2024 means that rent as a proportion of income has fallen by -8.7%, while in Camden, falling rent values have contributed to an overall drop of -7.9%.

This is followed by Harrow (-7.9%), Hammersmith & Fulham (-7.8%), and Tower Hamlets (-5.6%).

Despite this, a number of boroughs have actually become less affordable since 2024.

In Ealing, rent as a proportion of income has increased by 3.4%, followed by Haringey (3.3%), Bexley (2.8%), Richmond-upon-Thames (2.7%), and Enfield (2%).

Marc von Grundherr, Director of Benham and Reeves, commented:

“There’s no question that London remains an expensive city for renters and, for many people, the cost of housing still takes up a significant share of monthly income.

However, what our research clearly shows is that the situation is starting to move in the right direction. Strong wage growth across the capital over the past year means that, despite high rents, affordability has actually improved in many parts of the city.

While challenges remain and conditions vary by borough, rising earnings are helping to ease some of the pressure on renters and providing a more positive outlook than we saw this time last year.”