Londoners spending more of their income on rent as nationwide ratio falls
The proportion of people's income that is being spent on rent is falling across the nation, but in London, it continues to rise, a new report has shown.
According to the data published by the Institute for Fiscal Studies (IFS), for the nation as a whole (excluding London), the proportion of income that has to be spent on rental property is around 28 per cent on average This has fallen from 31 per cent in the last 20 years, showing that the market is becoming more affordable.
However, the opposite is true in the capital. During the same period, Londoners have seen the proportion of their income they have to spend on rent rising by three per cent, going from 37 per cent to 40 per cent on average.
The IFS said this situation in London has been caused by rapidly rising rent prices, which have been pushed higher by a combination of rising demand from private sector tenants and climbing house prices, which are 66 per cent higher than they were two decades ago.
"Renters are paying considerably more for their homes than 20 years ago," said the report.
"Relative to the general price level, the average (median) private rent paid in the mid 2010s was 53 per cent higher than that in the mid-1990s in London and 29 per cent higher in the rest of Britain. Those rises mainly occurred in the late 1990s and early 2000s (in London) or in the early and mid 2000s (in the rest of Britain)."
This data will no doubt further encourage new conversations about rent prices between politicians. Earlier this month, Labour leader Jeremy Corbyn vowed to introduce rent caps if he should get into power, while the Conservative government continues to try to boost building to combat the demand that causes price rises.
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15-October-17General Lettings News