Prospective tenants in London need a representative annual salary of £74,520 to afford the average-priced rental property, according to the latest figures from Propertymark.
The salary requirement in the capital has increased by 6.4% compared with a year ago, when it was £70,050, while the average agreed monthly rent rose by 4.2% in the latest month, from £2,385 to £2,484.
Propertymark’s report compares average agreed rents with the typical annual salary that referencing agencies would require a tenant to earn to afford a property at that rental level.
The North West recorded the second-largest monthly rise in average rents, increasing by 1.9% from £1,110 to £1,131.
The representative annual salary required in the region was £33,930, up 3.8% from £32,700 a year earlier.
Wales moved in the opposite direction. Its average agreed monthly rent fell by 0.9% from £1,009 to £1,000, while the representative salary requirement was 1.7% lower than a year ago at £30,000, compared with £30,510.
Monthly rent movements were mixed across the remaining regions. Average agreed rents increased by 1.7% in the West Midlands, 0.8% in the South East and 0.2% in Scotland.
Meanwhile, they fell month-on-month by 1.1% in the East Midlands, 0.9% in the North East, 0.7% in the South West, 0.2% in the East of England and 0.1% in Yorkshire and Humberside.
Kim Lidbury, president of ARLA Propertymark, said: “The latest figures show that rental markets continue to vary considerably regionally, with some experiencing further rent growth while others remain relatively stable or have seen modest monthly reductions.
“London continues to lead the market, recording the strongest monthly increase in rental prices, which has also driven a higher representative salary requirement for prospective tenants.”
Lidbury said year-on-year rental growth was moderating compared with the sharper increases seen in recent years.
She added: “Demand for privately rented homes continues to significantly outstrip the supply available, meaning rents remain historically high despite slower rates of growth.
“Until more good quality homes are brought into the sector and policies to support investment by landlords, tenants are unlikely to see the meaningful reductions in rental costs that many are hoping for.”
