Rental payments across the UK accounted for 52% of the average disposable income of £1,471 for those living outside of London, with the average monthly rental payment coming in at £761 outside of the capital.
However, those in London spent almost 89% of their disposable income on rent, an average of £1,879, according to the latest Landbay rental index.
If those that live in London were willing to move outside of the capital, they could expect to spend a far lower percentage of their disposable income on rent, much closer to the national average.
Those living in the South East spend 58% of their average disposable income on rent, equating to £1,053, compared to an average living wage of £1,817. Also, those in the East of England spent 55% of their salary on rental payments.
Landbay CEO and founder John Goodall commented: “Rents have continued to rise over the last five years, increasing by 9% across the UK since March 2013 and by 7% in London – with monthly payments remaining a burden on those struggling to save. 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.
“There has been much speculation about the long-term future of the buy to let sector from an investment perspective, however, demand remains strong as brokers would attest. Not a day goes by when there isn’t more news about the supply-demand mismatch in the UK housing sector and until this is resolved, tenants will continue to rely on the private rented sector to support them. With the right property and the right location, there are attractive yields to be had, and consistent rental demand will drive returns in the long-term.”
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