The latest insight into the rental market from Ocasa has revealed that the average tenant is paying 23.5% of their net earnings on the cost of renting, climbing as high as 42.8% in the nation’s least affordable pockets of the rental market.
Ocasa analysed the latest data on household earnings to find the monthly net income across each area of England. They then looked at this net income in relation to the average cost of renting and what proportion is required in order to put a roof over your head when looking to rent.
The research shows that the average household earns £4,030 after tax across England. But with the average monthly cost of rent currently sitting at £946 in England, it takes almost a quarter (23.5%) of our household income to cover the cost of renting.
Despite being home to by far the largest household earnings, London remains the least affordable region for the nation’s tenants. The average London rent of £1,672 per month requires 33.3% of the average monthly household net income (£5,026).
In both the South West and South East, the proportion of net earnings required to cover the monthly cost of renting also sits above the national average at 25.1% and 25% respectively.
With London ranking as the least affordable region of England when it comes to renting, it’s no surprise that it also dominates the least affordable areas at local authority level.
Westminster is the nation’s least affordable pocket of the rental market, where tenants can expect to pay 42.8% of their earnings on the average cost of renting.
Kensington and Chelsea and Newham rank second at 38%, followed by Islington (37.8%) and Camden (37.5%).
Outside of the capital it’s Seven Oaks that is home to the least affordable rental market, where tenants are currently paying 37.3% of their monthly income on the cost of renting.
Bristol (37.1%) and Oxford (36.7%) also make the top 10 least affordable rental markets with Hammersmith and Fulham (36.7%) and Hackney (36.5%) completing the top 10.
In contrast, Hyndburn is the nation’s most affordable rental market, where the average cost of renting requires just 13.6% of the average household’s net income.
Jack Godby, Sales and Marketing Director at Ocasa, comments: “The high cost of renting is certainly nothing new but we’ve seen a lack of suitable stock, coupled with consistent and increasing demand from tenants, continue to push rental prices ever higher.
“In addition, we’re simply not seeing the same levels of growth when it comes to earnings and this has caused the rental affordability gap to widen.
“As a result, the average tenant across England is paying almost a quarter of their post-tax income on the cost of renting. At the same time, the cost of living crisis has stretched them even thinner, with the additional costs associated with a rental property climbing considerably in recent months.
“With so many of us reliant on the rental sector it’s of vital importance, now more than ever, that we address the high cost of renting.”