A private renter on an average income is spending 23% of their income on the average rented home in England, according to new data published by the Office for National Statistics.

This figure is down from a recent high of 26.3% in 2016, as result of average wages growing faster than average rents. According to Hargreaves Lansdown, however, the ONS averages are hiding “eye-wateringly” unaffordable costs.

Dwelling stock data from the Department for Levelling Up, Housing and Communities suggests that nearly 20% of all dwellings were privately rented in 2020. The ONS deems a property affordable if a household would spend 30% or less of their income on rent.

Its latest figures indicated that the East Midlands and North West are the most affordable rental regions for lower income households living in the region. In London, by contrast, private renters would have to spend 37.7% of the average income on the average rent.

Hargreaves Lansdown personal finance analyst, Sarah Coles, said the averages are only telling a “small part of the story”.

“In reality, an awful lot of renters faced an uphill struggle, which has become even harder in the interim,” she commented. “There are massive regional differences, and despite rent cuts during the pandemic, renting in London is still eye-wateringly expensive. In the capital only the 25% richest people could describe rental as affordable. It means that for all but the best off in the capital, rents are ruinous.

“Elsewhere in the country, you need to be careful about averages. During the pandemic, a rise in the average wage was the result of more people on lower incomes losing work, so a rising average wage wasn’t a sign that everyone was getting richer: in fact it was the result of those on low wages losing work and becoming poorer.”

Coles also highlighted that higher rises at the top end of the wage spectrum can “distort” the average, and suggested this is why statisticians have also looked at whether people on the lowest 25% of incomes could afford the lowest 25% of rents.

“That’s when they found that the East Midlands and the North West are the only regions in England where people on the lowest incomes could afford the cheapest rents,” she added.

“Life could get even harder in the immediate future, because many landlords are cashing in on house price rises and selling up, while others are switching to holiday lettings. According to RICS, the number of rental properties coming to the market has dropped relentlessly over the past 12 months.

“This is pushing rents up, and agents expect them to go even higher: RICS is predicting annual rises of 2.5%. It means if you want to live in an area of high demand and low supply, you could easily end up paying far more than 23% of your income to get the property you want.”

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