In many areas of London and the South East, renters need an annual salary of £50,000 to rent without sharing

New data suggests that renters in many locations in London and the South East must be on a salary of at least £50,000 a year to rent without co-pay.

These two areas saw the largest rent increases over the past month, according to Goodlord’s latest rent index.

Average prices rose 7.98 per cent in London in August compared to July to £2,145 per month and in the South East by 13.95 per cent to £1,497 per month.

Greater London and the South East saw rents rise the most over the past month

An annual salary of £50,000 gives net wages after tax of around £3,169 per month.

Taking Goodlord’s average monthly rent of £2,145 from that figure leaves tenants around £1,000 a month to cover all other bills.

These bills include water, gas and electricity, as well as council tax, insurance, travel and subsistence expenses and any telephone and television subscriptions.

Tenants were left with £1,024 a month or £236 a week. It is assumed that a tenant rents a rental property alone at an average price and does not share it with others.

Tenants need an annual income of at least 30 times the monthly rent they intend to pay

A London-based letting agent explained that single tenants must earn an annual salary of at least 30 times the monthly rent they intend to pay.

Harriet Scanlan of real estate agency Antony Roberts said: “To satisfy reference agencies, applicants need an annual income of at least 30 times the monthly rent they intend to pay.”

“In Richmond, for example, the average rental price for a one-bedroom apartment is £1,700 per calendar month due to fierce competition, so prospective tenants need a minimum annual salary of £51,000 if they want to rent as a single tenant.”

“It’s quite a challenge, even for those working in London, where salaries tend to be higher, and will likely result in many applicants ending up sharing flats rather than having the luxury of living alone.”

Goodlord said the rental market across England remained ‘red-hot’ in August and little change was expected this month.

Although average rents fell slightly after a record-breaking July – in which average prices broke the £1,300 mark for the first time – renters continued to face high prices in the market’s busiest season, it said.

The average rental price fell slightly between July and August, with prices across England falling by 1.5 per cent to an average of £1,347 per property.

Despite not beating the July index, which set a record of £1,367, prices are up 10 per cent in August 2023 compared to the same point last year. The average rental costs are also 15 percent above the annual average for 2023.

Summer prices are usually pushed up by the influx of student accommodation. This year has also seen historical pressure on the rental market; drove prices to record highs.

The biggest increases in average prices have been in Greater London and the South East.

The situation was different in the northwest, where average prices fell by 20 percent.

This mirrors the pattern seen in the region last year, with rents rising sharply in July followed by a more subdued August.

Summer rental prices are usually boosted by the influx of student housing

Rents also fell by 6 percent in the north-east and by 10 percent in the south-west. There were enormous rent increases in both regions in July.

Goodlord’s William Reeve said: “So many records were broken in July that it’s not entirely surprising that August saw a slight fall in average rents and slightly longer vacancy periods.”

“However, if you look at the bigger picture, the market is obviously still extremely hot.

“Year-on-year the average rental cost has increased significantly, with the £1,300 per month barrier now being breached for the second month in a row.”

“September often brings with it the annual price peak, so it’s likely that we’ll see another month of high rents and short vacancies before a seasonal pace change kicks in.”