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Cost of renting falls as a proportion of income

The proportion of income that tenants spent on rent decreased from 32.64% in 2016 to 30.64% in 2019 despite increases in rental levels, The Deposit Protection Service’s (The DPS) Rent Index has revealed.

Affordability of renting improved due to a 2.69% increase in average salary (from £29,559 to £30,353) and a £77 decrease in average tenancy deposits (from £905 to £828) since the introduction of the deposit cap in June last year.

Matt Trevett, managing director of The DPS, said: “Although rents have risen over the past decade, other changes since 2016 have helped ensure renting has become on average more affordable.

“Predictions that rents would rise in response to the introduction of the tenant fees ban and deposit cap do not seem to have materialised, with many landlords seemingly declining to increase rents since last summer.”

Average rents reached a peak of £777 during the third quarter of 2019, before decreasing marginally by £4 to £773 during the following quarter.

Paul Fryers, managing director at specialist buy-to-let mortgage provider Zephyr Homeloans, said:  “Although the longer-term recovery in rental levels is likely owing to broader economic factors, changes to rental figures are also more likely at moments where property changes hands.

“Over the last couple of years, professional landlords have become a larger proportion of the buy-to-let market as more and more smaller or ‘accidental’ landlords sell up, partly as a result of increasing costs.”

Northern Ireland saw biggest increase in average monthly rents (3.01%) from £532 to £548 during Q4 2019, while average monthly rent in Yorkshire and The Humber decreased the most, from £551 to £524 (4.90%).