Salary needed to rent in London jumps as rents rise

High demand and limited supply continue to push rents higher, with the salary needed to rent in London soaring.

Propertymark’s rental price and average salary tracker reveals that London recorded the strongest monthly rental growth, with average rents rising from £2,385 to £2,484 (+4.2% month-on-month).

This increase means the representative annual salary needed to secure the average-priced rental home has risen from £70,050 to £74,520 (+6.4% year-on-year).

Demand continues to outstrip supply

According to the data, the North West saw the second-largest monthly increase, with average rents rising from £1,110 to £1,131 (+1.9% month-on-month), while the representative salary needed increased from £32,700 to £33,930 (+3.8% year-on-year).

Kim Lidbury, President of ARLA Propertymark (Association of Residential Letting Agents), explains across the country, rental prices continue to vary.

She 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. Elsewhere, regions such as the North West and West Midlands also recorded rental growth, while Wales and parts of northern England saw rents ease slightly over the month.

“While it’s encouraging to see year-on-year rental growth moderating compared with the sharp increases seen in recent years, the underlying challenge remains unchanged. 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.”

Wales recorded the largest monthly rent decline

The data also reveals Wales recorded the largest monthly rent decline, with average rents falling from £1,009 to £1,000 (-0.9% month-on-month).

It was also one of the few regions to see improved affordability year-on-year, with the representative salary needed falling from £30,510 to £30,000 (-1.7%).

Rental trends were mixed, with rents rising in London (+4.2%), the North West (+1.9%), the West Midlands (+1.7%), the South East (+0.8%) and Scotland (+0.2%), while all other regions recorded monthly declines.