Massive Rise For Percentage Of Income To Rent Homes
According to a sales and lettings agent, tenants’ percentage of income spent on rent has rocketed by as much as 72% since the dawn of the new Millennium twenty years ago.
The firm’s latest research found that in 2000 the average monthly rent in England was around 28.7 % of the monthly income. As expected London was the highest with 41.1% of income taken up by rent, followed by the South East at 31.2% and the South West with 29.4%.
Since twenty years ago the percentage of income that is needed to cover rent has risen by 16.8% throughout England to its present 45.5%.
Of course the capital ‘leads the way’ with an apparent 74.8% of the average monthly take home pay to cover the rent, a massive rise of 33.7% in the twenty years.
East of England is the second highest increase over the last two decades of 18.7%, with the South East at 18.6% making the region the second largest income to rent ratio at 49.8%.
In 2000, the East Midlands was the lowest region for an income to rent ratio with just 24.5% of average income being spent on rent, however toady it is the North East which has the lowest income to rent ratio of 32% with only a 7.4% increase since twenty years ago.
Director of the sales and lettings agent, Marc von Grundherr, said: “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.”