Our quarter three rental affordability report covers the period from July to September 2024. This is the third edition of the index, adding to the 2024 quarter two index, and the inaugural quarter one index.
The report focuses on the average rental share (per named tenant) versus individual average take-home income, leading to a rent to income ratio figure. This gives a clear picture of the percentage of net salary a tenant is spending on rent each month, and each year.
The index uses data from over 60,000 individual renters on the Canopy database from across the country.
The quarterly report only includes data from employed renters (excluding, unemployed, retired and students), to measure how much of their hard-earned salary is spent on rental payments each month.
Data shows that tenants are stretching beyond the 40% mark
Our quarter three index reveals that the typical UK tenant is spending 35.7% of their monthly take-home pay on rent.
This was calculated by dividing the national average net income, which is roughly £27,627 per year, by the national average monthly rent, which is £822 per paying tenant.
Typically, spending 40% of take-home salary is considered the very outer limit of affordability. The index findings show that many areas of the country are seeing the average tenant go beyond the 40% mark, particularly in London (44.5%) and the South-East (44.1%).
One in five tenants are spending over half of their take-home salary on rent in the UK (19%), the equivalent of over one million households!
Over one in ten (11%) spend over 60% of their income on rent, and around one in 20 (4%) spend over 80% of their payslip, raising concerns as tenants will still have other essential bills to pay after their rent.
London analysis
New for the quarter three index, we have crunched the numbers on rental affordability in the capital. We analysed the average rental costs and salary data for tenants in all of London’s 32 boroughs.
In three London boroughs, the average tenant is spending over half of their take-home salary on their rent. This isn’t as much tip-toeing over the recommended 40% affordability more a hop, skip and a jump over it! Tenants in Enfield (53.4%), Barnet (52.8%) and Haringey (51.2%) all live in the most unaffordable areas of London, as per the statistics. Interestingly, all three areas are in the North of London.
Newham is the most affordable area in the capital, with the average tenant spending a little over a third of their salary on rent (39.1%).
However, this means that every single London borough is less affordable than the national average.
Full London borough breakdown
- Enfield: 53.4%
- Barnet: 52.8%
- Haringey: 51.2%
- Harrow: 48.8%
- Barking and Dagenham: 48.7%
- Sutton: 48.2%
- Brent: 47.9%
- Hounslow: 47.7%
- Redbridge: 47.6%
- Havering: 47.6%
- Ealing: 47.2%
- Croydon: 46.8%
- Bromley: 46.7%
- Hammersmith and Fulham: 46.4%
- Kensington and Chelsea: 46.3%
- Camden: 45.6%
- Lewisham: 44.7%
- Lambeth: 44.4%
- Waltham Forest: 44.3%
- Westminster: 43.6%
- Islington: 43.2%
- Richmond Upon Thames: 43.1%
- Wandsworth: 43.0%
- Tower Hamlets: 42.9%
- Merton: 42.9%
- Kingston Upon Thames: 42.6%
- Hackney: 42.6%
- Bexley: 42.3%
- Hillingdon: 42.0%
- Greenwich: 41.7%
- Southwark: 41.3%
- Newham: 39.1%
Bournemouth and Oxford the most unaffordable cities
Our quarter three data highlights the regional divisions in affordability, with some major cities soaring high above the national average affordability rent to income ratio of 35.7%.
Bournemouth remains the least affordable city for renters, with the average tenant paying 47.2% of their salary on rent.
Despite some London boroughs showcasing huge unaffordability, the city as a whole is only the fourth least affordable city in the country.
Least affordable cities in the UK to rent (highest rent to income ratio)
- Bournemouth: 47.2%
- Oxford: 46.4%
- Brighton: 46.0%
- London: 44.5%
- Bath: 43.7%
- Portsmouth: 43.4%
- Reading: 41.2%
- Bristol: 40.9%
- Southampton: 40.8%
- Edinburgh: 40.3%
Oxford is just behind Bournemouth, with the average renter spending £895 per month on their share of the rent. This works out at 46.4% of the average take-home salary.
Most affordable cities in the UK to rent (highest rent to income ratio)
Belfast emerged as the most affordable major city (33.1%), with the North East boasting the next two most affordable major hubs in Sunderland (33.4%) and Newcastle upon Tyne (33.7%).
- Belfast: 33.1%
- Sunderland: 33.4%
- Newcastle upon Tyne: 33.7%
- Hull: 34.1%
- Aberdeen: 34.1%
- Glasgow: 35.7%
- Sheffield: 35.7%
- Leeds: 35.8%
- Nottingham: 35.9%
- York: 36.4%
Top ten least affordable local authority areas to rent in
Our index analysed the local authority areas with the least affordable rental market, and North London took both of the top two spots in Enfield (53.4%) and Barnet (52.8%).
Perhaps unsurprisingly, every single area was based in the South of England.
For some areas this was due to a high average rental price, for example, Uttlesford sees the average tenant pay a pricey £1,164 per month on their share of the rent.
However, in areas like Dover, the average price is much lower at £736, but an average tenant salary of just £20,300 means that the available housing stock becomes unaffordable for many.
Least affordable local authority areas in the UK to rent (highest rent to income ratio)
- Enfield: 53.4%
- Barnet: 52.8%
- Lewes: 52.3%
- Horsham: 51.6%
- Uttlesford: 51.5%
- Haringey: 51.2%
- Castle Point: 51.1%
- Waverley: 50.9%
- Dover: 50.7%
- West Oxfordshire: 50.6%
Most affordable areas to rent in the UK
The most affordable areas to rent in the UK are based in the North of England, Scotland, and Northern Ireland. Not a single area from the South of England featured in the top ten!
Halifax in West Yorkshire is the most affordable area, with an average monthly cost of just £564, paired with an average take-home salary of over £23,000 per year.
Most affordable areas in the UK to rent (lowest rent to income ratio)
- Halifax: 31.2%
- Darlington: 32.0%
- Paisley: 32.4%
- Dumfries: 32.4%
- Belfast: 33.1%
- Stoke-on-Trent: 33.3%
- Sunderland: 33.4%
- Carlisle: 33.5%
- Crewe: 33.5%
- Shrewsbury: 33.7%
Darlington in the North East also sees the average tenant spend less than a third of their money on rent (32.0%), and Northern Ireland’s capital Belfast is also very affordable in comparison to the wider UK.
Chris Hutchinson, CEO at Canopy, commented: “Our latest data shows stark differences in rental affordability across the UK, with some areas facing extreme conditions. In particular, parts of London have become almost unattainable, with tenants spending more than 50% of their net income on rent. This simply isn’t sustainable in the long term.
The rental market is in a fragile state. While it’s encouraging to see efforts being made to relieve pressure on tenants, any regulatory changes could inadvertently push landlords out of the market, shrinking the supply of properties.
Most landlords are already adhering to the spirit of the Renter’s Reform Bill, but the full consequences remain uncertain. The Government must tread carefully, so as not to dis-incentivise landlords further, which could ultimately lead to additional rental price pressure, deepening the affordability crisis."
Read more on how to make the most of your finances
Rental affordability is an ever-growing challenge for many, and we’re here to help both tenants and landlords tackle this and other issues that can arise in the competitive and evolving UK rental property market.
Our RentPassport provides a digital footprint that can take the hassle out of the process for renters, making tenant referencing for letting agents and landlords. Next time you move all you need to do is show letting agents and landlords your RentPassport which shows your previous rent history and puts their mind at ease to give you the green light without worrying about affordability.
Check out our resources page for more information and advice on all things rent.
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