A PropTech lettings platform is reporting that the level of income required to cover the cost of renting has increased across five regions in England.
Howsy analysed the current average cost of renting and what percentage of the average monthly net income was required to cover this cost, using data from government sources.
The research shows the South West has seen the biggest reduction in rental affordability year on year. While the average net wage in the region has increased 1.7 per cent to £1,890 in the last year, the average monthly rent has also jumped 6.1 per cent to £892 today; the largest increase of all regions.
As a result, the cost of renting now requires 47.2 per cent of the average monthly earnings in the South West, up from 45.2 per cent last year.
The North West has seen the next largest reduction in rental affordability. The average rent in the region now requires 39.7 per cent of the net monthly income, up from 38.7 per cent a year ago.
The East Midlands and the South East (both up 0.7 per cent) and the East of England (up 0.4 per cent) have also seen an increase in the level of monthly income required to cover the cost of renting.
London is still home to the highest rent-to-income ratio, with 58.9 per cent of net monthly income required to cover the average rent, although this has fallen 4.3 per cent in the last year; the biggest drop of all regions.
“The current impact of the pandemic is perhaps clearest within the capital where a severe fall in demand levels has seen rents tumble” explains Howsy chief executive Calum Brannan.
“However, while the topline figures show that London’s tenants are now paying less of their income on rent, this won’t be the reality for many who find themselves out of work or on furlough as a result of the current landscape.”
This post has originally been featured in Letting Agent Today.