One in five renters spend more than half their salary on rent: we reveal the least affordable cities for renters

One in five private tenants spends more than half of their gross salary on rent, according to data from the tenant information service Canopy.

With an estimated 11.6 million people in Britain renting privately, this could suggest that roughly 2.3 million tenants are spending more than half of their pre-tax wages on rent.

The average renter’s expenses are just under a third, or 30.6 percent, of their pre-tax wages.

Tenants are being hit by rising rents and higher costs for their other essential expenses.

Last month, Zoopla reported that average rents in Britain have risen by 29 percent since just before the start of the pandemic.

Meanwhile, the rise in inflation will also have hit renters hard, as the €100 you could buy in 2019 now actually requires €123.

Chris Hutchinson, CEO of Canopy, said: ‘It’s sobering to see that one in five tenants spend the majority of their salary on rent payments, and it nicely reflects the difficult situation that many tenants with homeownership aspirations find themselves in .

‘It highlights the financial pressure on tenants, reducing the amount of money they can save to achieve their goals.

‘Where we could see a positive change is towards longer leases for those who wish, promoting greater safety for families and communities.’

Canopy also revealed where in Britain tenants spend the highest percentage of their wages on rental costs.

The results are based on an individual’s share of the rent if he/she lives with others, and not on the costs for the home as a whole.

Poole in Dorset is the toughest area in Britain for rent affordability, with the average renter spending more than 40 percent of their wages on rent alone.

A similar story seems to be playing out in both Gillingham and Canterbury in Kent. The average renter in these two cities spends almost 40 percent of their net salary on rent.

In Brighton, the average tenant spends 38.4 percent of their net salary on rent, according to Canopy.

According to Canopy, the average tenant there earns £25,012 per year, while the average rent is £799 per month (£9,593 per year).

At the other end of the spectrum, Belfast is the most affordable city for renters in Britain, with the average renter spending less than a quarter of their salary on rent payments.

Despite having the highest average rental costs, London is actually more affordable than other areas in Britain based on local income.

Renters need to save an average of £1,208 a month to rent in the capital, but thanks to an abundance of well-paid jobs in the city they also enjoy high incomes averaging over £48,000 a year.

This means that tenants in London spend 30.2 percent of their income on rent – ​​which is just below the UK average of 30.6 percent.

This table shows the UK’s major cities and the average salary of tenants and the ratio of rent to income

Why are rents in Stirling so high?

Nine out of ten locations where tenants spend the majority of their wages on rental costs are in the south of England.

The only anomaly on the list is Stirling, in Scotland. Renters in the city have a low average income, meaning they spend an average of 37.8 percent of their wages on rent payments.

Although Stirling is far from the most expensive rental area in the country with an average rent of around £605 per month, the average salary of tenants in the city is only around £19,235.

Stirling is therefore a good example of how difficult it can be for tenants on lower salaries, as even modest rents compared to the whole country can become very difficult to afford unless their monthly salary is at a certain level.

Stirling in Scotland is a surprise inclusion in the top ten, with a low average income meaning tenants spend an average of 37.8% of their wages on rent payments

The worry is that things will get worse for renters in Stirling and other Scottish towns and cities before they get better.

Until recently, Scottish landlords could only increase rents on current leases by a maximum of 3 percent unless they received special permission.

However, the cap was lifted from March 31, meaning rental costs will come back under landlords’ control, 18 months after the first price freeze was introduced.

Oli Sherlock, director of insurance at rental platform Goodlord, said: ‘We can expect a range of consequences as a result. First, tenants should brace for an increase in rents.

‘Over the past year and a half, many landlords have seen their mortgage costs rise, so they will look to recalibrate rental prices.

‘This will likely cause a ripple effect on the market as tenants abandon this and look for new, cheaper places to rent.

‘This will shift regional price averages and mainly affect demand outside city centres.

He added: ‘In addition, we could see chatter around landlord exodus subsiding – lifting this restriction could encourage faltering landlords to stick around and not sell, which is positive for the market as a whole.’

How and when should you negotiate with your landlord?

In recent years, rents have risen enormously and more and more tenants are looking for homes in an undersupplied market.

Average private rental costs rose by 9 per cent in the year to February, figures from the Office for National Statistics revealed at the end of last month.

Tenants are paying an average of £102 more per month in rent than a year ago.

It can often seem like landlords hold all the cards when it comes to a rent increase. However, this is not necessarily always the case.

To start, it’s important to remember that one thing a landlord doesn’t like is vacancy periods: a period of time when the property is empty.

By imposing a notice period, they must find someone to replace the departing tenant. By doing this, they run the risk of the property being vacant for weeks or even months between the end of the current lease and the start of the new one.

In addition to the extra hassle, there are also costs associated with finding a new tenant, especially if the landlord engages a rental agent.

These include a finder’s fee, reference fees, inventory fees and sometimes a check-in and check-out fee that the landlord must pay to the rental agent.

There may also be cleaning and repair costs before the new lease starts.

The additional work and costs involved in setting up a new lease should give tenants some confidence in negotiating the rent increase, even if this comes against the backdrop of a hot rental market.

Ultimately, it’s usually worth negotiating with a landlord for any tenant who wants to stay in a property.

In the event of a rent increase, they can try to find a middle ground between what the current rent is and what the landlord or rental agent is now asking.

It is important to emphasize in a non-confrontational manner that rent has always been paid on time and that the property has been kept clean – and that there is no guarantee that a future tenant will extend the same courtesy.