Research by London lettings and estate agent, Benham and Reeves, has found that rental affordability across London has actually improved during the pandemic where the percentage of income required to cover rental outgoings is concerned.

Benham and Reeves analysed the rent to income ratio prior to the pandemic and found that across London, 64.4% of the average net monthly earnings was required to cover the average rent.

Benham and Reeves then analysed how this has changed based on the latest rental data combined with the latest earnings data from the ONS, whose estimates included furloughed employees and were based on actual payments made to these employees from company payrolls and the hours on which this pay was calculated.

The research shows that across London, this ongoing financial support via the furlough scheme and a reduction in the cost of renting means that the average London tenant is now paying just 60.2% of their income to cover the cost of renting; a -4.2% reduction. 

This trend has been seen across 23 of the capital’s boroughs and in some cases, has been far greater. In Camden, the average tenant was required to spend 74.5% of their income on the cost of renting prior to the pandemic. Today, this rental cost requirement has fallen by a huge -12.1% and sits at just 62.4%.

Lewisham (-7.1%), Kingston upon Thames (-6.8%), Hammersmith and Fulham (-4.5%), Barking and Dagenham (-4.3%), Harrow (-4.1%), Hounslow (-3.6%), Ealing (-3.6%), Kensington and Chelsea (-3.2%) and Bromley (-3.1%) also rank amongst the boroughs to have seen the biggest reductions in the percentage of net income required to cover rent. 

However, this hasn’t been the case across the whole of the London rental market. In Islington, the average tenant is now spending 65.7% of their net monthly income on the cost of renting, a 5.7% increase since the start of the pandemic.

Haringey has also seen a sharp uplift, with 5.1% more of the average net income now required to cover the average rent. 

Tenants in Wandsworth, Sutton, Greenwich and Tower Hamlets are also now paying between one and two per cent more of their income on rent, while Richmond, Lambeth and Southwark have seen the rent to income ratio remain largely unchanged. 

Director of Benham and Reeves, Marc von Grundherr, commented:

“The pandemic has caused a large degree of financial instability for tenants and landlords alike and so the last two years have been far from smooth sailing for those within the London rental sector. 

However, one silver lining to the ongoing uncertainty caused by Covid does seem to be an increase in rental affordability across much of the capital. 

This has come about due to two driving factors. The first being a drop in demand which has caused many landlords to slash rents in order to secure a tenant and recoup some form of rental income.  

The second has been the ongoing financial support of the furlough scheme which has made the difference between retaining employment and losing it for a great deal of people. As a result, they’ve been able to maintain some form of income, albeit at a lower level, and this has enabled them to cover the cost of renting.

As it stands, the cost of renting is more manageable now than it was two years ago and so those returning to the capital should be able to secure a decent rate of rent for the duration of their initial tenancy. 

Of course, as we do return to normality, this growing demand is likely to bring rental prices back to their pre-pandemic highs and so any tenants with intentions of snagging a deal should act sooner rather than later.”

Location	Pre-Covid	Currently	Change in Rent to Income Ratio
Average Rent (Sep 2019)	Average Net Salary (Oct 2019)	Rent to Income Ratio	Average Rent (Sep 2020)	Average Net Salary (Nov 2020)	Rent to Income Ratio
London	£1,697	£2,634	64.4%	£1,639	£2,721	60.2%	-4.2%
Camden	£2,536	£3,403	74.5%	£2,012	£3,223	62.4%	-12.1%
Lewisham	£1,324	£2,316	57.2%	£1,322	£2,643	50.0%	-7.1%
Kingston upon Thames	£1,390	£2,778	50.0%	£1,288	£2,981	43.2%	-6.8%
Hammersmith and Fulham	£2,117	£3,215	65.9%	£2,016	£3,288	61.3%	-4.5%
Barking and Dagenham	£1,194	£1,805	66.2%	£1,206	£1,951	61.8%	-4.3%
Harrow	£1,407	£2,365	59.5%	£1,445	£2,611	55.3%	-4.1%
Hounslow	£1,432	£2,260	63.4%	£1,416	£2,370	59.8%	-3.6%
Ealing	£1,463	£2,422	60.4%	£1,568	£2,758	56.9%	-3.6%
Kensington and Chelsea	£3,053	£5,190	58.8%	£2,977	£5,349	55.7%	-3.2%
Bromley	£1,321	£2,779	47.5%	£1,318	£2,966	44.4%	-3.1%
Hillingdon	£1,270	£2,097	60.6%	£1,244	£2,162	57.5%	-3.0%
Hackney	£1,834	£2,363	77.6%	£1,860	£2,481	75.0%	-2.6%
Waltham Forest	£1,309	£2,268	57.7%	£1,359	£2,458	55.3%	-2.4%
Bexley	£1,106	£2,360	46.9%	£1,113	£2,498	44.6%	-2.3%
Redbridge	£1,318	£2,385	55.3%	£1,311	£2,465	53.2%	-2.1%
Brent	£1,535	£2,206	69.6%	£1,494	£2,195	68.1%	-1.5%
Croydon	£1,136	£2,262	50.2%	£1,155	£2,363	48.9%	-1.3%
Merton	£1,530	£2,787	54.9%	£1,639	£3,060	53.6%	-1.3%
Barnet	£1,523	£2,490	61.2%	£1,485	£2,476	60.0%	-1.2%
Enfield	£1,310	£2,132	61.5%	£1,301	£2,150	60.5%	-1.0%
Havering	£1,169	£2,309	50.6%	£1,175	£2,364	49.7%	-0.9%
Westminster	£3,018	£4,043	74.6%	£2,822	£3,803	74.2%	-0.4%
Newham	£1,424	£1,999	71.2%	£1,476	£2,083	70.9%	-0.4%
Southwark	£1,654	£2,711	61.0%	£1,720	£2,816	61.1%	0.1%
Lambeth	£1,754	£2,561	68.5%	£1,961	£2,838	69.1%	0.6%
Richmond upon Thames	£1,857	£3,749	49.5%	£1,940	£3,869	50.1%	0.6%
Tower Hamlets	£1,803	£3,159	57.1%	£1,810	£3,108	58.2%	1.2%
Greenwich	£1,404	£2,649	53.0%	£1,494	£2,755	54.2%	1.2%
Sutton	£1,167	£2,335	50.0%	£1,133	£2,206	51.4%	1.4%
Wandsworth	£1,883	£3,395	55.5%	£1,948	£3,393	57.4%	1.9%
Haringey	£1,558	£2,339	66.6%	£1,644	£2,292	71.7%	5.1%
Islington	£1,914	£3,193	59.9%	£1,908	£2,906	65.7%	5.7%
Data Sources	ONS Private Rental Market Summary	ONS Employee Earnings in the UK	Rent as a percentage of net income	ONS Private Rental Market Summary	ONS Employee Earnings in the UK	Rent as a percentage of net income	Change between rent to income ratios

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About Benham and Reeves

●        Benham and Reeves is one of London’s largest independent letting and sales agents. 

●        Benham and Reeves is a family-run agency, established in 1958 in Hampstead, London. 

●        Benham and Reeves has 17 branches in prime residential London locations and five international offices in China, India, Hong Kong, Malaysia and Singapore.

●        The company specialises in a tailored, end to end service for its clients in London and worldwide, from the sale or letting of a property, to property management, tax accounting, snagging, refurbishment and furnishing solutions. 

●        Anita has 35 years of experience within the property sector, helping to build Benham and Reeves from a single branch in Hampstead to one of the most established independent estate agents in London. 

●        Anita has driven the company’s vision to offer a complete range of property investment-related services from purchase to handover, furnishing and refurbishment, lettings and property management. 

●        Anita also helped spearhead the company’s overseas expansion in China, Hong Kong, India, Malaysia and Singapore. 

●        Marc von Grundherr is the Director at Benham and Reeves. 

●        Marc joined the business in 1995 and has extensive knowledge of the London and UK property market.