Rent prices 139% higher in London than the average in England

Today the UK’s leading financial capability charity The Money Charity releases The Money Statistics, giving an overview of the financial situation in the UK.

The UK’s leading financial capability charity today draws attention to the astounding difference between rental prices across the country, with residents in London paying more than double that of the rest of country. The latest statistics from The Money Charity reveal average monthly rent for a two-bedroom house in England was £580 – in London this was £1,387 (139% higher).

In December the Valuation Office Agency published its latest figures for private rental prices on a range of properties across England. The figures disclosed the vast discrepancy in price, depending on where you are in the country. For example, the average rent on a three-bedroom house, the typical home for a family, was 147% higher in London.

To put into further context, the average price for a three-bedroom rental property was the cheapest in the North East of England, where it cost £525 a month – the same price as a single room in London.

Graph - Jan 2015

The Money Statistics also show that private renters spent an average of 41% of their income on rental payments, compared to owner-occupiers who spent, on average, 19%. In addition to this, 33.3% of private renters had weekly costs greater than 40% of their income. For owner-occupiers this was just 7.4%.

For those looking to buy a home, the picture can be just as bleak, with the average first time buyer deposit at £28,030 in October 2014 – 111% of the average salary (including bonuses). According to The Money Charity it could take the average person up to 16 years to save for the deposit on their first home, if they were saving the average amount into an easy access saving account or ISA.

Michelle Highman, Chief Executive of The Money Charity, said:

“These latest figures show how the country’s capital is becoming increasingly unaffordable for recent graduates and young professionals. And although UK house prices and rent rises are predicted to slow in 2015, they are still at a very challenging level for most people. While we welcome the news that wage growth has started to outstrip inflation, there is still a long way to go before we reach pre-2009 levels. Therefore people need to be extra cautious about how much they can afford and how they intend to meet the payments each month. A great way to do this is to create (and stick to!) a budget.

Anyone worried about their rent payments or already in rent arrears should seek impartial advice as soon as possible, from Citizens Advice Bureau, StepChange or one of the other free debt advice charities who will be able to help you properly assess your options”

Latest figures include:

  1. £55,384: average household debt (including mortgages) in November, up from £55,297 in October
  2. £3.17: average spend per household per day on water, electricity and gas in Q3
  3. 7.0%: the average amount households saved of their pre-tax income
  4. 1,121: people made redundant every day between August and October
  5. £116,327: average mortgage size for households with mortgages
  6. 2,083 CCJs are issued every day
  7. Every 5 minutes 20 seconds someone was declared bankrupt or insolvent
  8. £1.463 trillion: outstanding personal debt at the end of November 2014
  9. 54 properties are repossessed every day
  10. £28,030: average first-time buyer deposit

 

You can get the full picture at http://themoneycharity.org.uk/money-statistics/

 

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About The Money Charity:The Money Charity is the UK’s financial capability (financial education) charity.  Our vision is that everyone has the ability to be on top of their money as a part of everyday life.  We empower people across the UK to build the skills, knowledge, attitudes and behaviours to make the most of their money throughout their lives.The Money Charity is registered with the Charity Commission as a charity in England and Wales, number 1106941. A company limited by guarantee, incorporated under the Companies Act 1985, and registered in England and Wales, number 5244075.

Registered Office: 15 Prescott Place, London, SW4 6BS