The cost of renting a one-bedroom property in the UK now takes up nearly half the disposable income of the average young worker, new figures show.
According to the May Countrywide Lettings Index, the average cost of renting a one-bedroom home is £746 per month and accounts for 48% of the pay for an average young full-time worker.
For renters in London it is even worse. The average cost of renting a one-bed property in the capital is £1,133 per month, which takes up almost 57% of the average post-tax income for someone under-30.
Since 2007 rents have shot up 27%, outpacing a 16% growth in incomes.
Countrywide said that renters are coping with affordability pressures by house sharing.
Since 2007, the proportion of one-person households in the private rented sector has fallen by 3%, while four and five people households have also grown
Across the UK, average rents rose to 2.9% to £866, over the past last year.
Outside of London, the East of England saw the biggest rise in rents of 5.6% to £881 over the past year. The South East saw the smallest year-on-year increase of 1.1%.
Johnny Morris, research director at Countrywide, said: “In most parts of Great Britain, rising incomes have softened the impact of increasing rents. For more than half of the country, rents now take up less of the average person’s take-home pay than before the downturn in 2007.
“But in London rents have risen much faster than wages, stretching affordability. Many tenants have adapted to rising prices by either moving to cheaper areas, further from the centre, or sharing. Stalling rental growth in the capital begs the question whether London’s rents have reached their affordability limits for now.”
Recent figures from the Office of National Statistics show just how difficult it is for people in their 20s and 30s to get on the housing ladder.
According to the ONS, people aged 25-29 are now more likely to rent privately (43.3%) than own a home with mortgage (39%).
This tipping point in home ownership across the UK marks a dramatic change from just 15 years ago, when people in their late 20s were more than twice as likely to own a property (56.5%) rather than rent privately (21.4%).
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