Couples who are renting and wanting to start a family in London would need to spend 55.6% (£2,460) of their combined average monthly salary to rent an average three-bed property, according to new research by property crowdfunding platform Property Partner.
In one year, that would mean a couple would have to pay £29,520 in rent alone before even thinking about childcare and other costs.
The research – using data from Zoopla – looks at average monthly rental prices for one and two bed flats in the capital and compares how much it would cost to step up to an average three-bed house in all 33 London boroughs. Using the combined average net monthly earnings of a couple in London (£4,417), the study looked at the proportion of salary that would be needed to make those steps.
It reveals Generation Rent is facing an almost impossible task to rent larger properties in London. In Kensington and Chelsea – the least affordable borough to rent – an average one-bed flat would cost tenants more than 59% (£2,634) of their combined net monthly earnings, twice the London average (£1,311). That rises to 92% (£4,059) for a 2-bed flat, and 168% (£7,434) for a three-bed house.
The following table shows the 10 least affordable boroughs in London:
| Borough | Average rent for 1 bed flat | Rent as a % of combined salary for 1 bed flat | Average rent for 2 bed flat | Rent as a % of combined salary for 2 bed flat | Average rent for 3 bed house | Rent as a % of combined salary for 3 bed house |
| Kensington & Chelsea | £2,634 | 59.63% | £4,059 | 91.89% | £7,434 | 168.29% |
| Westminster | £2,602 | 58.90% | £3,864 | 87.47% | £5,978 | 135.33% |
| Camden | £1,814 | 41.06% | £2,738 | 61.98% | £5,383 | 121.86% |
| Tower Hamlets | £1,439 | 32.58% | £2,399 | 54.31% | £2,437 | 55.17% |
| Hammersmith & Fulham | £1,695 | 38.37% | £2,389 | 54.08% | £2,887 | 65.35% |
| Islington | £1,738 | 39.34% | £2,355 | 53.31% | £3,461 | 78.35% |
| Southwark | £1,589 | 35.97% | £2,194 | 49.67% | £2,608 | 59.04% |
| Hackney | £1,600 | 36.22% | £2,167 | 49.06% | £2,811 | 63.63% |
| Wandsworth | £1,480 | 33.50% | £2,152 | 48.72% | £2,591 | 58.65% |
| Lambeth | £1,485 | 33.62% | £2,099 | 47.52% | £2,325 | 52.63% |
| London average | £1,311 | 29.68% | £1,839 | 41.63% | £2,460 | 55.69% |
Source: research by Property Partner
Meanwhile, couples planning to start families face difficulties even in the more affordable outer London boroughs. To rent a two-bed flat in Bexley, Havering, Sutton, Barking and Dagenham, Bromley, Croydon, and Redbridge would eat up less than 30% of a couple’s combined salary. But tenants aspiring to move into a 3-bed house and looking to spend less than 30% of their combined salary would only have the option of Bexley, for £1,311 a month.
The following table shows the 10 most affordable boroughs in London:
| Borough | Average rent for 1 bed flat | Rent as a % of combined salary for 1 bed flat | Average rent for 2 bed flat | Rent as a % of combined salary for 2 bed flat | Average rent for 3 bed house | Rent as a % of combined salary for 3 bed house |
| Bexley | £753 | 17.05% | £1,052 | 23.81% | £1,311 | 29.68% |
| Havering | £882 | 19.97% | £1,132 | 25.63% | £1,417 | 32.08% |
| Sutton | £906 | 20.51% | £1,203 | 27.23% | £1,776 | 40.20% |
| Barking and Dagenham | £951 | 21.53% | £1,205 | 27.28% | £1,484 | 33.59% |
| Bromley | £885 | 20.03% | £1,292 | 29.25% | £1,569 | 35.52% |
| Croydon | £981 | 22.21% | £1,293 | 29.27% | £1,598 | 36.17% |
| Redbridge | £965 | 21.85% | £1,320 | 29.88% | £1,667 | 37.74% |
| Waltham Forest | £1,063 | 24.06% | £1,337 | 30.27% | £1,795 | 40.63% |
| Enfield | £973 | 22.03% | £1,366 | 30.92% | £1,763 | 39.91% |
| Hillingdon | £948 | 21.46% | £1,366 | 30.92% | £1,601 | 36.24% |
| London average | £1,311 | 29.68% | £1,839 | 41.63% | £2,460 | 55.69% |
Source: research by Property Partner
Dan Gandesha, CEO of Property Partner, said: “Our research will come as a shock to tenants in the capital. With London house prices now so high, the ranks of Generation Rent are rapidly expanding. And, as demand for larger rental properties has grown, finding affordable accommodation is increasingly difficult.
“Those unable to buy but hoping to start a family and move up the rental ladder may just be able to make ends meet in outer London boroughs. But the harsh reality is that they’ll be forced to bring up their children in a flat rather than a house. Although everyone knows Kensington and Chelsea, and Westminster, are totally out of reach on an average London salary, the surprise comes with Camden and Islington too.
“The age of the so-called second-stepper renter has not arrived. In fact at this rate, it looks like it may never come. Even in the cheapest borough, Bexley, a couple would have to fork out £15,732 a year of their joint net income to pay the rent on a 3-bed.
“Another sobering thought is that our research assumes both partners are in full time employment and earning the average London salary. The figures do not take into account that if a couple have one or two children, the costs of childcare and household bills would make meeting the monthly rent unachievable.
“It’s welcome news that the new Chancellor announced £1.4 billion for affordable homes in last week’s Autumn Statement, and that this is across a ‘wider range of housing’. This sounds like a sage commitment to increase the supply of affordable rental stock which will also help control rental prices.
“Traditional landlords though are suffering from recent tax changes including cuts in mortgage interest relief due to kick in next April. With increasing constraints on making a profit or even balancing the books, buy-to-let investors could be forced to either sell up or increase rents. We must ensure more rental homes are built to balance this out.”