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Tenants spend two thirds of their take-home pay on rent as average monthly cost of a one-bed passes £1,000

19/9/2016

The average rent for a one-bedroom property has surpassed the £1,000 mark, it was revealed today.

Tenants paid £1,010 on average for a one-bed home in August, meaning that on average they spend two thirds of their income after tax on rent.

In London, average rents are considerably higher at £1,461, according to the figures from property investment peer-to-peer platform Landbay.

Tenants paid £1,010 on average for a one bedroom home in August, according to the latest figures

Tenants paid £1,010 on average for a one bedroom home in August, according to the latest figures

With the average disposable income in the capital being £1,967, it means 74 per cent of Londoners’ take home pay goes on renting a one bedroom property.

Outside of London, the percentage is lower at 41 per cent of post-tax income given to their landlord each month. Overall, the figure for the UK – including London – is 67 per cent.

The research found that the average rent for two and three bedroom properties for the UK was £1,149 and £1,314 respectively.

John Goodall, chief executive of Landbay, said: ‘The buy-to-let market is a vital part of the UK’s housing mix, and rental properties have become an important stepping stone for first time buyers saving up for their own home.

‘However, with rents climbing, tenants saving up for a house face a triple challenge in trying to catch up with the pace of house price inflation, with more and more of their income spent on rent, and record low interest rates limiting their ability to save money.

‘Bold new steps should be taken to fix the UK’s housing crisis. It must be high on the agenda at the upcoming Autumn Statement, especially given that rising rents are partly due to stamp duty increases being passed on renters.’

It comes as separate research reveals that the number of young people seeking help because of problems with housing letting agents has more than doubled in the past two years.

Citizens Advice said university students moving into privately rented accommodation were likely to be among those ‘stung’ by having to pay hundreds of pounds for poor service.

The charity is calling for a ban on letting agents charging tenants fees.

UK RENTAL INDEX BY NUMBER OF BEDS
One bed Two bed Three bed
YoY % MoM Av. £ YoY MoM Av. £ YoY MoM Av. £
% % % % %
UK 1.67 0.09 1,010 1.78 0.12 1,149 2.07 0.18 1,314
England 1.66 0.08 1,044 1.79 0.11 1,184 2.1 0.18 1,335
Scotland 1.67 0.26 542 1.79 0.22 684 2.06 0.17 1,104
Wales 2.16 0.1 536 1.46 -0.03 647 1.4 0.16 605
London 0.79 -0.05 1,461 0.8 -0.04 1,938 1.44 0.08 2,702
UK without London 2.4 0.2 588 2.29 0.2 703 2.28 0.21 810
Source: Landbay

The charity dealt with 6,500 cases in the year to June, including more than 800 from 17 to 24-year-olds, with research showing complaints about delays getting basic repairs completed, or with high fees.

The price of letting agents’ fees had risen by up to 60 per cent in the last five years, with the average increasing from £125 in 2009-10 to £200 in 2014-15, rising to £700 in some cases, said the report.

Letting agents charge fees for admin tasks such as preparing the tenancy agreement, checking references and credit checks.

They may also require the tenant to pay a holding deposit after a prospective tenant has agreed to the rent but not yet signed the tenancy agreement. These fees are often non-refundable, and are charged on top of advertised rent prices and deposits for the property.

Read more: http://www.dailymail.co.uk/property/article-3796285/The-average-rent-one-bedroom-property-passes-1-000-equivalent-two-thirds-average-home-pay.html#ixzz4KjutW3xF

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