Benham and Reeves, a London lettings and estate agency, conducted an analysis using Office for National Statistics data. This research aimed to explore changes in rental affordability across England’s regions between 2017 and 2022, focusing on the relationship between rents and incomes.
Key Findings:
- Average Rental Costs in England: As of 2022, the average rent in England stands at £795 per month, while the average income is £3,050 per month. This means that, on average, renters spend 26% of their monthly income on rent, a proportion that has remained stable since 2017.
- London’s Rental Landscape: Despite being the least affordable region, London has seen improvements in rental affordability. The average rent in the capital decreased from £1,495 in 2017 to £1,450 in 2022. Simultaneously, average incomes rose from £2,975 to £4,155 monthly. As a result, the proportion of income needed for rent in London dropped from 50% in 2017 to 35% in 2022.
- Regional Variations: The East of England experienced a 4% decrease in the proportion of income needed to cover rent, with typical incomes at £3,560 against average rents of £865 per month. Other regions, such as Yorkshire and the Humber, the North West, South West, and East Midlands, also saw modest improvements in affordability.
Areas of Concern:
While the overall trend is positive, certain regions have witnessed a decline in rental affordability. The West Midlands, South West, and North West have seen increases in the proportion of income required for rent, raising concerns about tenant affordability in these areas.
Industry Insights: The Role of Government Policies
Marc von Grundherr, director of Benham and Reeves, points out a critical factor influencing the rental market: government policies deterring landlords. He suggests that a reduction in available rental stock due to these policies has contributed to the rising cost of renting, a trend that shows no signs of abating in the near future.