UK one-bedroom rental costs now almost 50% of average wage

UK one-bedroom rental costs now almost 50% of average wage

The popularity of the private rented sector and supply shortage of appropriate rental accommodation across the UK has seen rental costs of one-bedroom properties rise.

Summary:

  • The cost of renting a one-bedroom property in the UK has risen to 48% of the average under-30’s take-home pay
  • Renewal of tenancies sees the biggest jump in costs, with rents increasing by 5.2% over the last year
  • With the popularity of the private rented sector increasing, rental costs have risen by 27% in the last decade

The cost of renting a one-bedroom property in the UK has risen to almost half of the average young worker’s take-home pay.

With the average cost of a new tenancy on a one-bedroom home hitting £746 a month in May, some 48% of monthly take-home pay for a worker under 30 is spent on rental costs, data from property firm Countrywide showed.

Landlords have increased prices by 2.9% since May 2015, with the average monthly rent for all types of property across Britain rising to £945. In Greater London, the average new rent was up by 0.3% year-on-year at £1,292. Scotland and the North saw the highest year-on-year increase in rent, 12% and 4% respectively.

Tenancies coming up for renewal showed a bigger jump in costs, with rents rising by 5.2% over the year, to an average of £907 a month.

Recent years have seen a steep increase in the number of tenants, with 85% of current renters viewing their current accommodation as home. Renting may be getting costlier, but there is a growing preference to rent, particularly with those aged 20 to 39-years-old.

Rents look set to continue to rise, and the most recent monthly report by the Royal Institution of Chartered Surveyors predicted that they would rise at a faster pace than house prices over the next five years.

Across Britain generally, rents have increased by 27% since 2007, outpacing a 16% growth in incomes.

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