Dataloft Briefing notes | Addressing topical issues in UK rental markets

Steeply rising rents over the past year or two have focused attention on ‘affordability’ because it is central to the outlook for rental growth. Overall, declining affordability limits potential for rental growth.

In this Briefing note, we report headline trends from higher earners in London and Manchester.

Although affordability tends to a norm of around 30% because of tenant referencing requirements, higher earners spend much less of their income on rents.

• In London for instance, 36% of renters earn over £50,000 and they spend an average of 24% of their income on rent.
• Those earning over £70,000 spend an average of 21%.

While there are many other factors contributing to the choices renters make, these numbers are an indication of capacity for rental growth, if providers deliver a product that this segment of the rental market is prepared to pay for.

This analysis is extracted from our report to ‘underwrite rental potential’. If you would like to see an example of a report or talk to us about how we produce evidence to support target rents, please set up a call.

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A PDF of this report is available to download here >