London rents cripple under-30s financially
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Twentysomething Londoners face seeing more than half of their post-tax income swallowed up by rent, a report has found.
The cost of renting a one-bed in London now takes up 57 per cent of the post-tax income of an average full-time worker aged under 30 according to the index from lettings network Countrywide, up from 41 per cent in 2007, putting tenants in London under increasing affordability pressure.
The report found that the average cost of renting a one-bedroom home in London is £1,133 per month.
Rent increases in London have increased at a much faster pace than incomes in recent years, the report said.
Rents in London, which has high concentrations of rental properties, have increased by 48 per cent since 2007 – more than four times faster than incomes which have increased by 11 per cent – putting tenants in London under increasing affordability pressure, Countrywide said.
Across Britain generally, rents have increased by 27 per cent since 2007, outpacing a 16 per cent growth in incomes, according to the report.
In consequence, tenants have opted to reduce the burden by sharing, with the proportion of one-person households in the private rented sector decreasing by three per cent since 2007.
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The proportion of homes with a spare room in the sector has fallen by three per cent in the same period, suggesting that for many a spare room has become an unaffordable luxury.
Away from the capital, the proportion of income taken up by rent is lower than it was in 2007 in many places, Countrywide found.
Johnny Morris, research director at Countrywide, said: “In most parts of Great Britain, rising incomes have softened the impact of increasing rents. For more than half of the country, rents now take up less of the average person’s take-home pay than before the downturn in 2007.
“But in London rents have risen much faster than wages, stretching affordability. Many tenants have adapted to rising prices by either moving to cheaper areas, further from the centre, or sharing.”
The findings are based on Office for National Statistics (ONS) income figures and Countrywide’s own data showing actual rents achieved.