Barnet and Endfield are least affordable, when comparing rental cost with tenant take-home salaries
Tenant and landlord services provider Canopy have released their inaugural rental affordability index using 50,000 data points using monthly rent prices and take home salary to work out tenants rent to income ratio. You could be surprised by what it shows…
Overall, the outer Borough of Barnet came out as the least affordable area of London to rent in, with tenants here typically seeing nearly half (48.7%) of their net (take-home) pay going on their rent.
The national average is around 10% less (38%), and the London average is 39.9%.
Barnet also had a high average monthly rental cost per named tenant at £1,281.
The North London town of Enfield came out as the second least affordable London area to rent in, with around 48.7% of pay going on rent here.
Dagenham, Harrow, and Barking made up the top five.
Overall, the average rent to income ratio in London was only just over the UK average (38%). It took ninth place in the top ten table of UK cities with the highest rent to income ratio, with Bournemouth and Brighton taking the top spots.
Of all London areas, the rent to income ratios in Uxbridge and Bromley are the most in line with the UK average (both are around 38%).
The least affordable areas of London to rent in, based on rent to income ratio
| Location | Rent To Income Ratio (Net) | Average Net Income | Average Monthly Rent | |
| 1 | Barnet | 48.73% | £31,531 | £1,281 |
| 2 | Enfield | 48.65% | £26,215 | £1,063 |
| 3 | Dagenham | 47.11% | £25,755 | £1,011 |
| 4 | Harrow | 45.27% | £28,732 | £1,084 |
| 5 | Barking | 45.21% | £26,386 | £994 |
| 6 | Wembley | 44.71% | £29,670 | £1,106 |
| 7 | Sutton | 44.61% | £29,849 | £1,110 |
| 8 | Luton | 43.97% | £22,299 | £817 |
| 9 | Hayes | 43.53% | £26,511 | £962 |
| 10 | Croydon | 43.18% | £28,150 | £1,013 |
UK cities with the highest rent to income ratio – net / take-home
| Location | Rent To Income Ratio (Net) | Average Net Income | Average Monthly Rent | |
| 1 | Bournemouth | 46.70% | £19,929 | £776 |
| 2 | Brighton | 46.51% | £20,628 | £799 |
| 3 | Oxford | 44.92% | £24,656 | £923 |
| 4 | Stirling | 43.55% | £16,676 | £605 |
| 5 | Bath | 41.45% | £26,285 | £908 |
| 6 | Portsmouth | 40.64% | £21,479 | £728 |
| 7 | Southampton | 39.99% | £20,618 | £687 |
| 8 | Milton Keynes | 39.91% | £26,134 | £869 |
| 9 | London | 39.86% | £36,368 | £1,208 |
| 10 | Swansea | 39.86% | £18,520 | £615 |
Using almost 50,000 data points, the Rental Affordability Index paints a comprehensive picture on the correlation between income and rental costs across the UK.
It shows that the majority of UK tenants have rental costs that are at the very limit of what experts believe is ‘affordable’.
The Canopy experts advise that spending around 30% of gross (pre-tax) income on rent is typically considered affordable, while 40% is at the outer limits of what many can make work. Most UK renters are currently going above this.
Across the UK, over a quarter (27.3%) are spending at least half of their take-home (net) salary on rent.
In London specifically, 30% of tenants are spending over half of their salary on their rent.
In Barnet this was 38%.
UK cities with the lowest rent to income ratio – net / take-home
| Location | Rent To Income Ratio (Net) | Average Net Income | Average Monthly Rent | |
| 1 | Belfast | 29.12% | £25,111 | £609 |
| 2 | Dundee | 30.52% | £21,011 | £534 |
| 3 | Aberdeen | 31.70% | £20,099 | £531 |
| 4 | Hull | 32.65% | £19,765 | £538 |
| 5 | Inverness | 32.83% | £22,016 | £602 |
| 6 | Newcastle upon Tyne | 33.30% | £20,198 | £560 |
| 7 | Glasgow | 33.65% | £22,417 | £629 |
| 8 | Sheffield | 33.86% | £21,882 | £617 |
| 9 | Derby | 33.88% | £21,652 | £611 |
| 10 | Wakefield | 34.08% | £21,799 | £619 |
Overall, Belfast came out as the most affordable major city for renters in the UK, with the average tenant spending just under a third of their take-home salary in rental payments (29.1%).
Chris Hutchinson, CEO at Canopy, commented:
“It is sobering to see that more than a quarter of UK tenants are spending the vast majority of their take-home salary on rental payments, and it neatly encapsulates the tricky situation that many tenants with aspirations of home ownership are in.
According to our latest data, renters are spending 38% of their take-home income on rent vs 18% for homeowners paying mortgages. That highlights the financial pressure on renters, meaning less money is able to be saved to achieve their goals.
Despite the price stability that further regulation would have on the market, there would likely be additional disincentives for landlords, leading to more leaving the market, and therefore reducing rental housing supply, or those remaining being less inclined to adequately maintain their properties. Where we could see positive change is towards longer tenancies for those who desire them, fostering greater security for families and communities.”
Find out more at https://www.canopy.rent/resource/our-first-rental-affordability-index-q1-2024.
