Renting is a significant financial challenge for many households in the UK, with tenants in most regions needing higher salaries to secure a home than they did a year ago.
Although affordability has improved marginally in some parts of the country, rising rents continue to place pressure on budgets in many markets.
To add to those pressures, the private rented sector is currently undergoing significant change following the introduction of the Renters’ Rights Act, while concerns remain about housing supply and the availability of rental homes in some areas.
According to new research from property industry body Propertymark, affordability varies significantly between regions, with some markets becoming increasingly difficult for tenants to access.
Its latest Rental Price and Average Salary Tracker uses agreed rental prices from around 15,000 letting agencies and calculates the income tenants typically need to pass referencing checks. The salary requirement is based on annual earnings being at least 30 times the monthly rent.
The average rental price in the UK is now £1,467, meaning tenants typically need an annual salary of £44,010 to secure an average-priced home. Average rents rose by 1.5% month-on-month, although they were 0.4% lower than a year earlier.
London remains the least affordable market
London continues to be the UK’s most expensive rental market. The average monthly rent rose from £2,259 in April to £2,307 in May, which means the representative salary needed to secure a typical rental property has hit £69,210.
At the other end of the scale, the North East remains the most affordable region, with average rents of £877 per month and a required salary of £26,310. However, affordability pressures are increasing there too, with the salary needed to rent rising by 2.9% over the past year.
Scotland has recorded the biggest monthly increase
Scotland saw the strongest month-on-month rental growth of any UK region, with average rents jumping from £1,167 in April to £1,257 in May, an increase of 7.7%.
The representative salary needed to secure a rental property in Scotland is now £37,710, up 2.3% on a year earlier.
Propertymark says the scale of Scotland’s rise reflects continuing pressure in markets where tenant demand exceeds available rental stock.
Northern regions see affordability tighten
One of the most notable findings in the report is the growing income needed to secure rental accommodation in parts of northern England.
Yorkshire and Humberside recorded the largest annual increase in salary requirements, rising 3.5% from £28,290 to £29,280. The North East followed with a 2.9% increase, while Scotland recorded a 2.3% rise.
Although these regions remain significantly more affordable than London and much of southern England in absolute terms, the figures show affordability pressures are growing.
Some southern markets become easier to access
Not every region saw affordability worsen, with a handful recording improvements.
The South East recorded a 1.8% fall in the salary needed to secure a rental home, while the East of England saw a 0.9% decline. Average rents in both regions remained relatively stable compared with a year earlier.
Propertymark President Megan Eighteen says: “May’s figures underline how localised rental market conditions have become across the UK. While average rents increased nationally during the month, much of that growth was driven by stronger-performing regions such as Scotland, London and parts of northern England, rather than a broad-based rise across all areas.”
She adds: “The data also shows that affordability pressures remain a significant concern. In most regions, the salary needed to secure an average-priced rental home has increased over the past year, with particularly notable rises in Yorkshire and Humberside, the North East and Scotland.”
While London continues to be the UK’s least affordable rental market, the figures show affordability pressures are no longer confined solely to the capital and its surrounding commuter belt. Some of the largest increases in the salary needed to rent are now being recorded in parts of northern England and Scotland. It means affordability is becoming a growing challenge even in markets traditionally viewed as more accessible to tenants.
