Are private rental prices too expensive in the UK?
GERRARDS CROSS, UK. September 26th, 2024 – New 2024 research, analysed by LandlordBuyers.com, shows that private rental prices have all increased across England (8.5%), Wales (8.5%), Scotland (7.6%) and Northern Ireland (9.9%) in the last 12 months.
Experts say, on average, you should be spending 30% of your monthly salary* on your rental fees. Despite this, in the following regions you will be expected to pay over 30% of your income on rent:
– London = 53.4% of your salary on rent
– South East = 37.5% of your salary on rent
– South West = 36.5% of your salary on rent
– East England = 35.9% of your salary on rent
– Scotland = 32% of your salary on rent
– West Midlands = 31.9% of your salary on rent
This is a contrast to the regions across the UK where you can be expected to pay under the 30% salary threshold on your monthly rent payments
– North East = 24.7% of your salary on rent
– Wales = 24.8% of your salary on rent
– East Midlands = 27.3% of your salary on rent
– Yorkshire = 27.8% of your salary on rent
– North West = 29% of your salary on rent
Discussing the current state of the UK rental market, LandlordBuyers.com Managing Director, Jason Harris-Cohen, said: “A North-South divide definitely still exists but the divide is tapering. Only in mid-September did estate agent Hamptons release data that showed the gap between rental values in the North and rental values in the South of England has narrowed to its lowest point in over a decade”, comments Jason. “In fact, while it was still more expensive to rent in the South, Southern rents were only 37% more expensive than those in the North – down from 43% more in August 2023 and a peak of 55% more in November 2021.”
Jason adds that whether the gap will narrow further, stay the same or widen depends on a number of factors. “One will be landlords themselves: which ones decide to exit the market and where their rentals are geographically located. Buy-to-let professionals are holding their breath ahead of autumn’s Budget. If pockets of landlords, perhaps mainly in the South, decide to sell, we could see supply restricted, values rise and the gap widen again.”
“Conversely, if Labour gets to grips with levelling up, we may see the appeal of Northern towns surge, wages catch up with Southern counterparts and demand for property – both to buy and rent – increase.”
“House prices will play their part too”, adds Jason. “Stagnating property and rental values in the South have been blamed for the rental value slowdown, whereas house price growth in the North has been broadly strong. If this trend continues, we could see Northern values increase further and approach something more like rental equilibrium across the country.”
“When it comes to the gap between average salaries and average rental prices, the figures show there’s still an imbalance. While the Office for National Statistics revealed wage growth was running at 5.1% over the three-months to the end of July 2024 – outpacing inflation at 2.2% – Goodlord found the average cost of a new rental home in England was 7% higher in August 2024, compared to the same point in 2023.”
*The data is based on average monthly salary for workers in that specific region vs the average monthly rental price for tenants in that specific region
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