Third of UK rental properties are ‘unaffordable’

Research by specialist rental platform, Ocasa, has revealed that almost a third of houses in England and Wales are classed as unaffordable.

According to the Office for National Statistics (ONS) a rental property can be defined as affordable when the cost of rent doesn’t exceed 30% of a household’s income.

Ocasa examined the costs of renting in different postcodes of England and Wales and the average household income and discovered that 31% of areas are unaffordable, based on the ONS definition.

The average annual rent was found to be £12,763 in England and Wales, while the average annual income is £43,341, meaning rent accounts for 29% of average household income.

Head of Sales and Marketing at Ocasa, Jack Godby, commented: ‘It’s reassuring to see that the topline cost of renting remains theoretically affordable for the average household but it’s fair to say that this probably isn’t the reality facing many at the moment, as the cost of living crisis is putting a real squeeze on our finances.

‘The cost of rent alone might not break the bank, but once you add household bills and travel, it equates to quite a considerable sum for the average household and millions of people are currently struggling to cover these costs.’

The research also showed how the North East was the most affordable area with just 20% of the average annual household income of £35,774 being taken up by rent.

Yorkshire & Humber was the next cheapest region with rent consuming 22% of annual income, followed by the East Midlands (23%), North West (24%), West Midlands (25%), and Wales (26%).

In more expensive areas, rent was only just deemed affordable, with average rent in the East, South East and South West of England making up 30% of household income.

London was found to have the worst rental market, as while the average income is £54,194, rent consumes 40% of this, alongside expensive average annual bills totalling £21,439.

The city is home to the top ten most unaffordable places in the UK, according to the research, with the most expensive postcodes being SW1, WC2 and W2.

In related news, human rights charity Amnesty International is calling for affordable housing to be made a human right in law to combat growing homelessness as a result of the cost of living crisis.

Photo by Chris Robert