Tenants spend a third of pay on rent - but affordability is improving

A survey by specialist lender Landbay reveals that tenants outside of London typically spend 33 per cent of their monthly pay, before tax, on rent - and in the capital itself it’s as much as 61 per cent.

Renters outside London earn a typical monthly salary of £2,317 before tax, but pay out £769 in rent.

In London, despite having higher monthly pay packets, tenants are paying as much as 61 per cent of their gross salary on rent for the average rental property. For a one-bedroom property this drops to 47 per cent.

Despite these figures, however, wage growth has outstripped rental growth in all regions of the UK. 

Landbay says that in the past 12 months, average rental growth in the UK (excluding London) has increased 1.25 per cent, meaning tenants are paying £120 per year more. 

However, monthly gross pay has improved by £768 per year, leaving tenants £648 better off.

Other regions with tenants with higher than average rent as a proportion of their pay are the South East and East England, which pay 42 per cent and 38 per cent respectively of their gross salary on rent.

Regions with the lowest proportion of money being spent on rent include the North East (25 per cent), Yorkshire & Humberside (26 per cent) and the North West (27 per cent). 

John Goodall, CEO and founder of Landbay says: “Improved affordability is welcome news for renters. For tenants looking to save up for a house, the prospect of having more money in their pocket each month will help them get one step closer to owning their own home. Wage growth is continuing to improve across the UK so the outlook for tenants can only get better."