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

January 17, 2020
  • 20 years ago, the average rent accounted for 28.7% of the average income in England.

 

  • In London, this increased to 41.1% of income required to cover rent.

 

  • The South East (31.2%) and South West (29.4%) were 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%.

 

  •  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%).

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
Sources:
Salary data
National Archives
ONS
Salary calculator
Private rents
CCHPR – historic
National Archives – England
England
Wales
Scotland

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