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The Rental Cost of a One-Bedroom Now 48% of the Average Income

A new lettings index shows that the average cost of renting a one-bedroom home in Great Britain now accounts for nearly half the post-tax earnings of a typical young full-time worker.

A new lettings index shows that the average cost of renting a one-bedroom home in Great Britain now accounts for nearly half the post-tax earnings of a typical young full-time worker.

With the average rent for a one-bedroom property rising to £746 per month in May, 48% of the average post-tax wage for a worker under 30 is now spent on rental costs, as shown by Countrywide’s newest lettings index.


Since May 2015, landlords have increased rental costs by 2% with the average rent for all types of property across the UK rising to £945 per month.


Compared to almost a decade ago, British tenants are now paying 3% more of their post-tax income on their rent in 2016 than they were in 2007.


According to the report, throughout this 9-year period rents have increased by 27% - outpacing the average 16% growth in annual salaries.


In London rents are increasing at an even quicker pace, with rents in the capital growing by 48% since 2007, more than four times as fast as the 11% rise in income.


The cost of renting a one-bedroom home in the capital now takes up 57% of the income of an average full-time worker aged under 30 and is set at an average of £1,133 per month.


On the other hand, Scotland and the North saw the highest year-on-year rental growth with a 12% and 4% rise in rents respectively.


With ‘Generation Rent’ now staying in the private rented sector for longer than ever before and rental rates reliably increasing month-on-month, the shift towards a rental focused housing market is continuing to benefit UK property landlords.

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