Increasing rents hit London tenants
The Index shows the average cost of renting a home in the Capital increased by 3.1% over the past year to £1,233 per month.
In contrast the average amount a tenant earns in Greater London decreased by 6.8% to £36,000 per annum.
Data from this month’s report shows similar trends during May 2012 when average rents in Greater London increased by 6.3% and average tenant income lowered by 3.4% from May 2011.
This means tenants in the Capital are now paying rents that are 8.7% higher than two years ago but earning 3.5% less.
The Index also found that the cost of renting a home around the rest of the UK increased by 2.5% from May 2012 to £787 per month.
When the Greater London figure is removed the average cost of renting a home in the UK is £668 per month. Renting a home in the Capital is now 84.6% more expensive than the rest of the UK.
Andy Richards, business development director at HomeLet, said: “Rents in Greater London are continuing to increase which is a strong reflection of the continued demand for properties within the Capital.
“The increase in demand could be driven from lower income households who are unable to obtain property in the social sector.
“‘Generation rent’ – those who would have become an owner-occupier in the past but are unable to do so due a lack of mortgage availability and high prices – also continue to play their part in driving demand.
“It appears the profile of our tenants in the Capital is changing however the trend in increasing rents doesn’t appear to be doing so, with this month’s HomeLet Rental Index showing those renting in Greater London have an average £254 less disposable income this month compared to this time last year.
“This is a significant amount of money which, to the low income families and generation rent who could be saving for a deposit, could affect not only their daily lifestyle but also their long-term plans.
“Affordability is vital for all tenants and the Housing and Generation Committee report launched this week proposing ways of making the Capital’s private rented sector fit for purpose, shows how the government values the market as a way of life for an increasing amount of people and is taking steps to improve it for both tenants and landlords.”