Tenants outside London 'spend over half of disposable income on rent'
Rent payments consume just over half the disposable income of tenants outside London, according to a new study by Landbay.
The Landbay Rental Index revealed that those living and working outside the capital now spend an average of 52 per cent of income on rent, out of an average monthly take-home figure of £1,471.
In March, the average rental figure outside London was £761 a month, up 1.21 per cent year-on-year.
These figures compare favourably with the situation faced by renters in London. Although rents have barely risen at all in the capital over the last 12 months, the average cost there is £1,879 a month, which represents 89 per cent of the £2,108 the average earner takes home in the capital. In practice, however, most working households in London will have more than one wage earner.
An easy money-saving option could be to work in London and commute in from surrounding regions. The typical rent in the south-east is £1,053, 58 per cent of the typical take-home pay for the region of £1,817. In the east of England, which includes counties bordering Greater London like Essex and Hertfordshire, rents are 55 per cent of take-home pay.
For those commuting into London, however, this saving will be offset by increased transport costs, as well as the loss of free time this will involve.
The cheapest region in which to rent is the north-east, where only 41 per cent of the typical take-home pay of £1,350 is spent on rental costs.
Noting that rents have risen above inflation in recent years, Landbay chief executive John Goodall said rental fee levels make it hard for people to leave letting behind and move into home ownership.
He explained: "Tenants saving up for a house face a triple challenge with more and more of their income spent on rent, partnered with trying to catch up with the pace of house price inflation and record low interest rates limiting their ability to save money."