The Inside Edge
If you’re thinking about renting a property be prepared to surrender almost half of your take home pay or more. Rents hit record levels in September and look set to rise even more as landlords hike up their rates.
Research has revealed that the average monthly rent rate rose by 1.6% in September alone taking the typical payment up to £890 a month. This is making rents unaffordable to many across the country.
Rental asking prices have increased each month in 2011 with a total increase of 4.6% in the last 12 months. This has added a whopping £468 onto the average annual rental bill.
Those living in London appear to be hit the worst. Despite earnings being 41% more here than on average, the rents charged in London cancel out any benefits of a higher salary. Average rents in London account for 76.3% of average earnings each month. On average, landlords with rental property in London charge £2,075 a month whilst the typical London family brings in £2,721 in net monthly income.
By comparison, the best rental properties offering the best value are in Yorkshire. Here average rents are only 35.2% of incomes. With rental prices increasing at such an alarming rate it will be harder for UK families to afford to live in the areas in which they work or have family and friends. It’s a catch 22 situation as many people choose to rent so that they can save for a deposit on their first property, but with little in the way of disposable income left for savings this is going to be very hard.
As a result of rental rises, many young professionals are starting to opt for flat shares in an attempt to save money on rent and put into a first home deposit. Of course, it all depends on where you want to live or rather where you need to live. If you can relocate to cheaper areas without any detriment to your working or personal life then this may be a good option to consider.