Tenants in London are having to spend more than half of their income on rent, according to the latest figures from Savills. But how does this compare to what the property owners are paying in mortgage repayments?
In the capital, the average renter spends over 59.4% of their monthly wage on rent. However, property owners in London, including homeowners and landlords, pay just a quarter of their monthly income on repaying their loan.
The average rent for a one-bedroom property in 18 out of London’s 33 boroughs is now over £1,000 per month.
The cost of renting in each London borough
|Average monthly rent for one-bed flat||Average monthly rent for two-bed flat||Average monthly rent for three-bed flat||
Proportion of private rental housing
|Barking and Dagenham||£750||£950||£1,200||17.7%|
|Kingston upon Thames||£995||£1,300||£1,600||22.5%|
|Richmond upon Thames||£1,200||£1,500||£2,150||21.8%|
|Hammersmith and Fulham||£1,343||£1,712||£2,383||31.7%|
|City of London||£1,842||£2,492||N/A||35.9%|
|Kensington and Chelsea||£1,950||£2,708||£5,108||35.8%|
The research also discovered how much a first time buyer really needs in the capital.
The median household income of London’s first time buyers is £58,600, and rising fast – last year it was £55,600. However, despite the average salary increasing, the required deposit has soared in the last 15 years.
In 2000, the average first time buyer deposit in the capital was £10,000, equivalent to 32% of the typical salary.
By 2005, deposits had more than doubled, reaching £21,000, or 43% of the average first time buyer’s income.
Just five years later, in 2010, it had more than doubled again to £56,000, or 118% of a first time buyer’s wages.
Today, the average deposit for a first time buyer home is £74,000, or 127% of a first timer’s earnings.