The cost of renting in London has outstripped income growth by more than three times since 2007, Countrywide’s Monthly Lettings Index for January has revealed.
The cost of London renting has outstripped income growth by more than three times since 2007, Countrywide’s Monthly Lettings Index for January has revealed.
Since 2007 incomes only fluctuated by 10% compared to 34% rent growth, as tenants in the capital typically saw rents rise from £966 in 2007 to £1,295 in 2016.
The same isn’t the case for the whole of the UK where average rents have risen by 12% since 2007, matching 12% income growth based on Office for National Statistics data.
Rental growth has now slowed, as rents increased by 1.2% in the year to January, the slowest growth rate for three years.
Johnny Morris, research director at Countrywide, said: “Nationally rents in January rose at the slowest rate since 2012, as some of the upward pressure on prices subsided and affordability limited further rises.
“Across most of London and the South East the slowdown in rental growth is the first since 2010, where rents have been growing for the past six years.
“The most sustainable way of creating a more affordable rental market in London and the South is by building more homes of every tenure.
“Unlike in the US where institutional investors build homes to rent, in the UK the sector is dominated by small landlords meaning the link between new homes getting built and the rental market isn’t nearly as close as it should be.”
