Rental property market crisis shown in map as over a third of incomes go on rent | Personal Finance | Finance

The property market may have cooled off, but its rental counterpart remains red hot. Prices have followed other living costs over the past year in soaring to new heights, to the point where rent alone swallows up more than a third of the average income in 160 English councils. Check out the Reach Data Unit’s tool below to see how affordable rent is in your local area.

While homeowners have suffered astronomical energy bill hikes over the past year, those letting have had to contend with soaring rents as well.

Attempts to reign in runaway inflation have caused their own problems. With interest rates at post-financial crisis highs, unaffordable mortgages mean many hoping to buy have had to shelve their plans and become trapped in the rental sector.

House prices may have started to fall, but rents are yet to follow suit. Prices paid by tenants in the UK increased 4.7 percent in the 12 months to February 2023 – up from 4.4 percent in January. 

The latest dwelling stock count from the Department for Levelling Up, Housing and Communities (DLUHC) found just under five million privately rented properties in England alone in 2021, with their affordability varying widely across the country.

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The least affordable in the country is to be found, unsurprisingly, in London. Of the top ten local authorities where the rent-to-income ratio was highest in Engand, eight were in the capital.

Chief among them is Kensington and Chelsea. The average monthly rent in the borough is £2,300, according to the latest figures from the Valuation Office Agency. Compared to an average wage of £3,132 before tax, this works out at a rent-to-income ratio of 73 percent. 

Next came Westminster (69 percent), Sevenoaks in Kent (63 percent) and Merton in South West London (61 percent). Elsewhere in the country, Manchester defied its more affordable Northern counterparts with the highest ratio outside of the South (44 percent).

Middlesbrough was the most economical area in which to let property. The North Yorkshire town boasts the cheapest rents in the country – at just £450 a month on average – working out to just 21 percent of the mean salary. Allerdale and County Durham are next on the list at 22 percent each.

In a separate survey, the Office for National Statistics (ONS) visited a subset of rental properties in England in February 2022 and again in February 2023. It found that 50.6 percent of the total had increased in price over the past year.

This proportion was highest of all in London, where two-thirds (66.8 percent) of rentals had upped their rates, and lowest in the North West (27.9 percent). 

Across England, 18.2 percent of properties had seen prices go up by at least ten percent – in London this was the case for 33.3 percent.

The average rent bump in London was 12 percent, followed by the North West (10.5 percent) and Yorkshire and the Humber (9.9 percent).