The majority of UK tenants are at the very limit of what experts believe is ‘affordable’, according to research by tenant and landlord services provider Canopy.
The company’s second rental affordability index has analysed data from 46,000 employed renters among its customer base in an effort to paint an accurate snapshot of the reality faced by the majority of renters when it comes to salary spent on rent.
According to Canopy, spending around 30% of gross (pre-tax) income on rent is typically considered affordable.
The analysis found that, on average, even after paying their tax, UK tenants are spending over a third (35.7%) of their take-home salary on rent.
What’s more, around one in five UK tenants (19.3%) are now spending at least half of their take-home salary on rent, leaving little left for other essential bills and disposable income.
One in ten (11.3%) spend over 60% of their wage on rents. Furthermore, one in 20 tenants (4.4%) spend over 80% of their take-home salary on their share of the rent.
Canopy stresses that It isn’t doom and gloom for all tenants, however – one in ten (11%) spend less than 20% of their take-home salary on their share of the rent and that rises as high as three in ten (28%) in Darlington, County Durham.
The North East of England boasts the most affordable cities for renters, with Sunderland (32.8%) and Newcastle upon Tyne (33.7%) both sitting in the top three most affordable cities in the country.
Northern Ireland’s capital is also very affordable, with Belfast (33.1%) sitting in second.
Unsurprisingly, London is the least affordable region of the UK for renters, with the average tenant spending 44.3% of their take-home pay on their share of the rent.
The South West (44.1%) and South East (41.1%) are close behind as the most unaffordable regions in the country, meaning that across much of the southern areas of the country tenants are struggling for affordable rents.
The UK city with the highest rent to income ratio is Bournemouth, with the average tenant spending 46.9% of their salary on rent.
Tenants in Brighton (46.3%) and London (44.3%) also spend a large portion of their salary on rent.
Edinburgh (40.6%) also makes the top five list for the most unaffordable cities for renters.
Chris Hutchinson, CEO at Canopy, commented: “The average tenant in the UK is now spending over a third of their take-home pay on their share of the rent; in many areas of the UK the average rises higher than 40%. It is sobering to see that some tenants are even spending 80% of their salary on rent.
“Considering these numbers don’t include essentials like groceries, commuting costs and utilities bills, the figures raise serious questions on how feasible saving for a mortgage is for the majority of tenants in this country.
Hutchinson added: “What is clear is that the market is in a precarious position, in that steps clearly need to be taken to make life easier for tenants, yet further regulation is likely to drive landlords away from the market and leave a smaller pool of properties available for tenants to choose from.”
