Paragon’s new Rental Affordability Index compared the average percentage of annual salary spent on rental payments to reveal an average rental affordability ratio. According to the figures, the average rental affordability ratio for the whole of England is 32.8% from an annual income of £31,200
Based on this, Copeland, Allerdale and Barrow-in-Furness were found to be the most affordable locations to privately rent in England last year.
On average, private rent in the three local authorities, all located within Cumbria, was less than 20% of the average salary of residents of those areas. Copeland topped the affordability list with the average annual rent of £6,101, equating to just 14% of the average annual salary for the town of £43,463. Annual rent prices in Allerdale equated to 17.8% of average salary, with Barrow-in-Furness at 19.6%.
Other local authorities with affordable rents included North East Lincolnshire (19.6%), Carlisle (19.7%) and Bassetlaw (19.7%).
At the other end of the scale, all of the least affordable local authorities to rent were located within London. Kensington & Chelsea topped the list, where the average rent was 98.1% of the average resident’s salary, whilst Westminster was 91.3%. Hackney (63.3%), Hammersmith & Fulham (61.1%) and Camden (61%) were the next in the least affordable list.
Across England, the average salary of £31,220 equated to 32.8% of the average rent. Regionally, the most affordable regions were all located in the north of England, with the North West coming out as the most affordable at 23.7%, followed by the North East (24%) and Yorkshire & Humber (24.3).
London (51.3%), the South East (36.1%) and the East of England (32.4%) were the least affordable.
By property type across the country, the average four-bed home equated to 56.1% of salary to rent, followed by three-bed (38.7%), two-bed (31.3%), one-bed (25.2%), studio (17.4%) and a single room (17.4%).
Richard Rowntree, Paragon Bank Managing Director of Mortgages, said: “These figures paint a revealing picture, with the most affordable rental locations mainly concentrated in northern areas. House prices are typically lower in these regions, meaning that rents tend to be lower. At the other end of the scale, it is not surprising to see London as home to the least affordable locations and that is why London has the highest proportion of house sharers in the UK.”
