Tenants are typically spending two-thirds (67%) of their disposable income on paying rent, Landbay’s Rental Index has revealed.
The average rent for a one bed property reached £1,010 in August compared to an typical disposable income of £1,497.
In London three quarters (74%) of pay is going towards rent, with an average rent of £1,461 compared to a disposable income of £1,967, though outside London 41% is handed over to landlords.
John Goodall, chief executive and founder of Landbay said: “The buy-to-let market is a vital part of the UK’s housing mix, and rental properties have become an important stepping stone for first-time buyers saving up for their own home.
“However, with a rapidly growing population and a chronic undersupply of new houses, property prices are growing even further out of reach for aspiring homeowners.
“With rents climbing too, even in the face of Brexit uncertainty, tenants saving up for a house face a triple challenge in trying to catch up with the pace of house price inflation, with more and more of their income spent on rent, and record low interest rates limiting their ability to save money.”
Rents across the UK grew by 0.12% in August, taking annual growth to 1.83%.
Goodall added: “With a new Prime Minister, a new Chancellor, and a new London Mayor, bold new steps should be taken to fix the UK’s housing crisis.
“It must be high on the agenda at the upcoming Autumn Statement, especially given that rising rents are partly due to stamp duty increases being passed on renters.
“Phillip Hammond’s fiscal plan should also give more support to savers struggling to find a rewarding home for their money in this protracted period of record low interest rates.”