New figures from FindaProperty.com have revealed that UK households are spending an average of 28% of their take-home income on rent, rising to 71% in London.
The latest Rental Index, recently released by the property website shows that the average asking price for renting property in the UK now stands at £868 per month. This is an increase of 1% for the corresponding period in 2011 but remains below the record set in September 2011 of £890.
Currently UK households have an average net income standing at £27,242 per year meaning that those individuals who live in rented accommodation are spending approximately £10,416 on rent.
However, for those living in London the amount spent on rent increases significantly to the point where, at an average of 71%, individuals are spending almost as much on rent as the average UK household takes home in income!
Last year’s rental price increases appears to have come to an end for the time being with the slowdown driven by the steady or falling price of houses and larger flats. In contrast, the rental asking prices of studios and one and two bedroom flats are at an all-time high, creating a tough rental environment for tenants seeking smaller, more affordable accommodation.
Samantha Baden, property analyst at FindaProperty.com, said:
“Average rental prices peaked in September of last year but have come down since then, most likely as a result of more properties coming onto the market.”
“Overall, rental supply increased in the first quarter of the year, especially for bigger properties. In contrast, smaller homes remain in limited supply and as a result, individuals and couples are still facing record asking prices for smaller flats and therefore spending a significant proportion of their overall household income on this.”
“This is particularly pertinent in areas like London where demand is high, which is why tenants looking for more affordable rental property should consider the impact of location as well as size.”