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feamproffitt · 8 years ago

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Do you Need £2,058 a Month to Access 100% of the UK Rental Market?

According to the BBC’s housing calculator, if you were to rent a one-bedroom property which was mid-priced for the local market, £380 a month would only grant you access to 1% of the UK rental market. On the other end of the spectrum, you would need £2,058 a month to access 100% of the UK rental market for the same specifications. (1) Although the BBC’s housing calculator does not have data for all regions across the UK (see the example image below), the figures paint an interesting picture of the UK rental market.

(Source: 1: BBC’s Housing Calculator)

The capital, in particular, is notable for its soaring rents, especially considering the exodus of 65,890 Londoner’s who attempted to escape property prices. (2) In addition, data published by Totally Money revealed that for individuals earning London living wage, only two London postcodes are affordable: Enfield in Zone 6 and Abbey Wood in Zone 4. (3) Aside from the cost, there are blogs dedicated to unveiling the horrors of renting, which range from mould, smashed windows and no insulation, and “unscrupulous landlords with their dingy buy-to-let empires.”

It’s therefore, no surprise that the rental market received a significant amount of attention in the UK’s Housing White Paper. One of the main points addressed the lack of opportunity for secure, family-friendly tenancies, which are 2-3 years long. (4) The current is just 6 to 12-months on average, which could cause feelings of insecurity. (5) In response to the White Paper, Jo Miller, chief executive of Doncaster council specifically praised the Government’s proposal to deliver “more homes for affordable rent,” claiming it to be a “great step forward.” On a similar note, Sian Berry, a Green Party London assembly member said, “The government is at last catching up with the real world [of] renting.” (6)

Based on the BBC’s housing calculator, the graph below details the percentage of the rental market you would have access to depending on what you could afford to pay for a one-bedroom property, which was mid-priced for the local market.

The table below details some of the areas which become affordable as you start to increase your rental budget for a one-bedroom property which was mid-priced for the local market, according to the BBC’s housing calculator.

The data makes London’s soaring prices evident, supporting the fact that in January 2017, “average rental values in London (£1,497) were 68.5% higher than the UK (£888).” (7) In addition, the data shows that the difference between 1% and 20% of the housing market under these specifications is £70 a month.

Monthly rent (£) % of the UK rental market you can afford Some of the locations made available 380 1% County Durham, North Lanarkshire 450 20% East Staffordshire, Carmarthenshire, Perth and Kinross, Newport, North Lincolnshire 550 40% Highland, Stirling, Broadland District, County of, Herefordshire, City of Plymouth, City of Leicester 650 55% Cornwall, Wiltshire, Swindon, East Devon, District, City of Southampton, Birmingham District, Swansea 750 62% Chichester, South Gloucestershire, Milton Keynes, Colchester District Canterbury District, Tunbridge Wells District, Maidstone 850 71% Basingstoke and Deane, District, West Berkshire, South Oxfordshire District, Vale of White Horse District, Bath and North East Somerset, City of Bristol 950 77% Epping Forest District, Brentwood District, Havering London Borough, Bexley London Borough, Reigate and Banstead District, St Albans District 1,050 82% Guildford District, Croydon London Borough, Runnymede District, Woking District, Spelthorne District, Barking and Dagenham 1,150 86% Windsor and Maidenhead, Hillingdon London Borough, Enfield London Borough, Redbridge London Borough, Waltham Forest London Borough, Bromley London Borough 1,250 91% Merton London Borough, Kingston Upon Thames, Richmond Upon Thames, Hounslow, London Borough, Harrow London Borough, Barnet London Borough, Enfield London Borough, Greenwich, Lewisham 1,350 93% Ealing London Borough, Brent London Borough, Haringey London Borough 1,450 95% Southwark London Borough, Lambeth London Borough, Wandsworth London Borough 1,550 96% Tower Hamlets London Borough, Hackney London Borough 1,650 98% Hammersmith and Fulham, Camden London Borough, Islington London Borough 1,750 98% 1,850 98% City and County of the City of London 1,950 99% City of Westminster 2,058 100% Kensington and Chelsea London Borough

Written by Jenna Kamal

Sources

Graph and table data collated from: http://www.bbc.co.uk/news/business-23234033

http://www.bbc.co.uk/news/business-23234033

http://www.standard.co.uk/news/london/exodus-of-30somethings-from-london-speeds-up-as-property-prices-soar-a3353916.html

http://www.totallymoney.com/london-minimum-wage-rent-crisis/

https://propertymoose.co.uk/blog/uk-housing-white-paper-2017/

http://www.which.co.uk/money/investing/how-investing-works/guides/asset-classes-explained/commercial-property-investment-explained

https://www.theguardian.com/housing-network/2017/feb/07/start-building-experts-housing-white-paper

https://homelet.co.uk/assets/documents/January-2017-HomeLet-Rental-Index.pdf

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