One in ten London tenants spends over 70% of their take-home salary on rental payments
New rental affordability study reveals that London tenants spend much more of their take-home pay (44.5%) on rent than the national average (36%)
London tenants are spending a huge proportion of their take-home salary on rent, with one in ten spending over 70%, according to shocking new data.
Typically, spending 40% of take-home salary is considered the very outer limit of affordability.
The latest Canopy reports shows that the average London tenant is actually spending 44.5% of net take-home salary on rental payments, with the typical tenant in some London boroughs spending in excess of 50% of their take-home pay on rent.
Over a quarter of London tenants (26%) spend over 50% of their pay on rent.
Astonishingly, around one in 12 London tenants spends over 80% of their take-home pay on rent.
In three London boroughs specifically, the majority of tenants are spending over half of their take-home salary on rental payments.
In Enfield (53.4%), Barnet (52.8%), and Haringey (51.2%), most tenants have less than half of their income leftover for bills and general spending, once rent has gone out of their bank accounts
Newham is the most affordable area in London, with the average tenant spending 39.1% of their salary on rental payments. This is still around 3.5% more than the national average though.
On a cost basis, Kensington and Chelsea has the most expensive rental properties.
The average tenant in this borough spends £1,642 on their share of the rent – that’s £19,700 per year.
Westminster (£1,518), Camden (£1,503), and Islington (£1,310) are also particularly expensive.
Just two London boroughs boast an average rental price below £1,000 PCM – Croydon at £991 PCM, and Bexley at £920 PCM.
Average monthly rent paid per tenant:
- Kensington and Chelsea: £1,642
- Westminster: £1,518
- Camden: £1,503
- Islington: £1,310
- Richmond upon Thames: £1,251
- Hammersmith and Fulham: £1,250
- Tower Hamlets: £1,232
- Wandsworth: £1,222
- Southwark: £1,204
- Hackney: £1,194
- Lambeth: £1,186
- Barnet: £1,142
- Newham: £1,138
- Haringey: £1,134
- Bromley: £1,128
- Redbridge: £1,112
- Kingston upon Thames: £1,102
- Harrow: £1,100
- Ealing: £1,100
- Hounslow: £1,097
- Greenwich: £1,095
- Brent: £1,090
- Havering: £1,088
- Sutton: £1,075
- Merton: £1,072
- Enfield: £1,070
- Lewisham: £1,049
- Waltham Forest: £1,010
- Hillingdon: £1,006
- Barking and Dagenham: £1,002
- Croydon: £991
- Bexley: £920
Kensington and Chelsea may have the highest rental prices, but the borough also has tenants with the highest income.
The average renter in Kensington and Chelsea takes home a steep £48,500 per year after tax, with Westminster (£47,703), Camden (£45,871), and Southwark (£40,534) close behind).
Tenants in Enfield have the lowest average salary after tax (£26,615), explaining why the rent to income ratio is so high in the area.
Chris Hutchinson, CEO at Canopy, commented: “Our latest data shows stark differences in rental affordability across the UK, with some areas facing extreme conditions. In particular, parts of London have become almost unattainable, with tenants spending more than 50% of their net income on rent. This simply isn’t sustainable in the long term.
“The rental market is in a fragile state. While it’s encouraging to see efforts being made to relieve pressure on tenants, any regulatory changes could inadvertently push landlords out of the market, shrinking the supply of properties.
“Most landlords are already adhering to the spirit of the Renter’s Reform Bill, but the full consequences remain uncertain. The Government must tread carefully, so as not to dis-incentivise landlords further, which could ultimately lead to additional rental price pressure, deepening the affordability crisis.”