LONDON — Londoners are seeing 40% of their income swallowed by rent as house prices in the capital spiral, according to the Institute for Fiscal Studies.
A new IFS report found the rent-to-income ratio in Britain excluding London has fallen by 3% — from 31% to 28% — in the last twenty years, but climbed by 3% — from 37% to 40% — in London over the same period.
Median percentage of income spent on rent among private renters
The growing rent-to-income ratio in London has been driven by rapidly-increasing rent prices in a market where house prices grew by 66% between 2007 and 2017:
Median weekly private rents (adjusted for inflation)
The chart shows that London rents increased by 38% between 1994-1996 and 2001-2003, alongside a much smaller 12% in the rest of the UK. Following a period between 2001-2003 and 2008-2010 where real rents flatlined, rents in London began to grow fast again, increasing by 11% while they fell by 4% in the rest of the UK.
“Renters are paying considerably more for their homes than 20 years ago,” said the report.
“Relative to the general price level, the average (median) private rent paid in the mid 2010s was 53% higher than that in …read more
Source:: Businessinsider – Finance