Private tenants in England spend over a third of income on rent

Private renters in England are spending more than a third of their income on their rents, according to the Office for National Statistics. That is above what the ONS deems an affordable rent.

In England, it calculates that in 2023 households who rent privately had a median income of £3,448 a month but were paying out £1,178 in rent – so their rent was taking 34.2% of their income. The ONS says a rent is affordable if it uses 30% or less of a household’s income.

For comparison, the average first time buyer will be spending 22.1% of their income on their mortgage according to UK Finance.

Dan Wilson Craw, Deputy Chief Executive, of the campaign group Generation Rent, told Channel 4 News:

“In a healthy housing system, the average household should comfortably be able to afford the average rent. The fact that rent is not affordable lies at the root of many of our society’s problems – it is difficult to save for your future or make big decisions like starting a family or your own business.”

The latest figures show that rents have been above affordable levels in every one of the last nine years. The chart below shows how rents have been consistently above the 30% threshold in England – though the situation is better in Wales which has been below the threshold since 2017.

(The ONS doesn’t currently produce similar data for Scotland or Northern Ireland though it’s working on doing so from next year).

The affordability ratio has improved in 2023 compared to 2022 though the ONS warns that any year-to-year changes should be treated with caution, suggesting that affordability in 2023 was broadly the same as it was in 2015.

That’s the national picture but in the rental market there are some big variations across the country.

Perhaps unsurprisingly, London has the worst affordability ratio (39.8% of income going on rent) with the South East and the North West also above the 30% threshold. All the other regions fall below the threshold with the West Midlands (25.4%) and the North East (25.5%) having the lowest affordability ratios.

But the picture is more complex than that because the differences aren’t just between regions but within them – and often the differences are stark. While the ONS reports that two thirds of local authorities have affordable rents, the map below shows local authorities with the least affordable median rents are urban centres like Manchester, Bristol, Bath and Brighton, as well as London. The darker the blue, the larger the share of median incomes going on rent.

In Manchester, 45.6% of median incomes go on rent – that is higher than all but one of the London boroughs. Kensington and Chelsea beats it with a ratio of 52.2%. But together – though 200 miles apart – they have the highest affordability ratios in England.

All of these figures are based on the view that 30% or less of your income being spent on rent makes it affordable. The ONS itself points out that there is no widely accepted standard for this number, and it quotes a review from the Scottish Government which found ratios from 20% up to 50% of income being used in different countries.

These figures are also based on the gross income of households – so that’s before the payment of income tax or National Insurance – meaning the slice of disposable income spent on rent will actually be much larger in most cases.

Landlords blame the situation on a lack of property, saying there is now an average of 21 people chasing every home to rent. Meera Chindooroy at the National Residential Landlords Association, told Channel 4 News:

“…tackling the gulf between supply and demand in the rental market is the key to tackling high rents. Anything else would merely paper over the cracks.”

The Association wants the Chancellor to encourage the supply of new, decent quality rented homes – a call echoed by Generation Rent, who also want more homes to be built, with an emphasis on social homes that are genuinely affordable.

The government’s housebuilding target, which was set out in the 2024 Labour manifesto, is for “1.5 million new homes over the next parliament.”