"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"
- Chris Hutchinson - Canopy
Tenant and landlord services provider Canopy has released data from their second rental affordability index, which reveals that the majority of UK tenants are at the very limit of what experts believe is ‘affordable’.
The index analyses data from over 60,000 individual renters, however, this quarterly rental affordability report only includes data from employed renters, which accounts for 46,000 Canopy customers, to paint a more accurate snapshot of the reality the majority of renters faced when it comes to salary spent on rent.
The Canopy experts advise that spending around 30% of gross (pre-tax) income on rent is typically considered affordable.
On average, even after paying their tax, UK tenants are spending over a third (35.7%) of their take-home salary on rent.
More shocking still, 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 rent. Most astonishingly, one in 20 tenants (4.4%) spend over 80% of their take-home salary on their share of the rent.
It isn’t doom and gloom for all tenants though – one in ten (11%) spend less than 20% of their take-home salary on their share of the rent and even as high as three in ten (28%) in Darlington, County Durham.
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 of the most unaffordable cities for renters.
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.
Wider UK Regions
Zooming out from cities to look on a wider regional level, the unsurprising news is that 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.
Most unaffordable regions of the UK for tenants
In London average tenants are spending 44.3% of their salary on rent. The South West is a close second with average tenants spending up to 44.1% as are tenants in the South East.
In Wales, the average tenant spends 38.4% on rent and tenants in the West Midlands make up the top five with a rent-to-income ratio of 37.7%.
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 utility bills, the figures raise serious questions on how feasible saving for a mortgage is for the majority of tenants in this country.
“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.”
