A 2024 study reviewed by LandlordBuyers.com shows that private rental prices have gone up over the past 12 months in England (8.5%), Wales (8.5%), Scotland (7.6%), and Northern Ireland (9.9%).
Financial experts advise tenants to spend no more than 30% of their monthly salary on rent. Yet, in the following areas, renters are paying far above that percentage:
- London = 53.4% of salary on rent
- South East = 37.5% of salary on rent
- South West = 36.5% of salary on rent
- East England = 35.9% of salary on rent
- Scotland = 32% of salary on rent
- West Midlands = 31.9% of salary on rent
Conversely, several regions still see rental costs below the 30% salary threshold:
- North East = 24.7% of salary on rent
- Wales = 24.8% of salary on rent
- East Midlands = 27.3% of salary on rent
- Yorkshire = 27.8% of salary on rent
- North West = 29% of salary on rent
Speaking on the current UK rental market, Jason Harris-Cohen, Managing Director of LandlordBuyers.com, remarked: “A North-South divide definitely still exists but the divide is tapering. Only in mid-September did estate agent Hamptons release data that showed the gap between rental values in the North and rental values in the South of England has narrowed to its lowest point in over a decade,” explains Jason. “In fact, while it was still more expensive to rent in the South, Southern rents were only 37% more expensive than those in the North – down from 43% more in August 2023 and a peak of 55% more in November 2021.”
Jason also highlights the factors influencing the future of the North-South divide in rental prices. “One will be landlords themselves: which ones decide to exit the market and where their rentals are geographically located. Buy-to-let professionals are holding their breath ahead of autumn’s Budget. If pockets of landlords, perhaps mainly in the South, decide to sell, we could see supply restricted, values rise and the gap widen again.”
He adds, “Conversely, if Labour gets to grips with levelling up, we may see the appeal of Northern towns surge, wages catch up with Southern counterparts and demand for property – both to buy and rent – increase.”
Jason further mentions the role of house prices in the rental market. “House prices will play their part too. Stagnating property and rental values in the South have been blamed for the rental value slowdown, whereas house price growth in the North has been broadly strong. If this trend continues, we could see Northern values increase further and approach something more like rental equilibrium across the country.”
“When looking at the difference between average salaries and average rental costs, there is still an imbalance. While the Office for National Statistics revealed wage growth of 5.1% in the three months to July 2024 – outpacing inflation at 2.2% – Goodlord reported that the average cost of a new rental home in England had risen by 7% in August 2024 compared to the previous year.”
