||"Despite rising rents across the UK, 1 in 5 are still paying less than in 2007"
Rents are lower than you think
Surge in rental costs since 2007 has been limited to London & South East.
The popular narrative of ever rising rents
surpassing incomes looks to be misleading
as in most of the country rents have grown in line with wages. Wages in the UK have increased by 12 per cent since 2007 according to the ONS and rents have increased by the same amount.
In 2007, the average monthly rent in the UK peaked at £809 but as the recession hit rents fell and were down 11 per cent by 2008. This brought down the monthly cost of renting the average home to £720, back to 2004 levels. It wasn’t until the start of 2010 that rents started rising again.
Despite rising rents since then, across the UK as a whole, 1 in 5 tenants is still paying less rent than they were in 2007. This is certainly the case in the North and Wales where the average tenant is still paying around £12 a month less. With wages up by 14 per cent since 2007 in these area, as well as low inflation keeping living costs down, renters should find themselves better off than they were pre-recession.
But the rental market runs along the classic North/South divide and in London and the South East rents have grown well beyond incomes. A lack of supply and high demand has pushed rental growth well beyond that of incomes. Londoners have fared the worst with rents growing by 34 per cent while incomes have only increase by 10 per cent since 2007. In the South East, rent and wage growth were 21 per cent and 12 per cent respectively.