Private Rental Sector (PRS) Tenants are finding Buy To Let rents are unaffordable as many are handing over more than half of their take home pay to keep a roof over their heads according to the property website – Rightmove.
The average pay to rent ratio across the UK is 38% – but up to a 1 million of the country’s 3.4 million Private Rented Sector tenants are paying much more, say the online property portal.
Tenants paying out the most rent from their pay packets:
- South East – 41%
- London – 40%
Paying the least rent from gross wages:
- Scotland – 35%
- North East – 36%
Some tenants pay even more – with 16% in London and 19% in the South East forking out 60% of their net income.
Despite demand far outpacing the number of properties available to rent, Rightmove Director, Miles Shipside reckons tenants cannot afford to pay any more.
Searches for buy to let properties have soared by 43% in the past 12 months, while the number of properties to rent has only nudged up by 3% according to Rightmove’s latest quarterly consumer confidence report.
61% of tenants and 47% of landlords predict higher rents in the next 12 months, but 43% of landlords expect rents to hold steady.
Mr Shipside said: “While the rental bubble is unlikely to deflate as there is no readily acceptable alternative to the rented roof, it does appear to be approaching a limit in some areas. Agents report that the seemingly incessant demand is causing rental price pressure to spill over into other previously less sought-after areas and some tenants are attempting to negotiate lower rent. This is a clear sign that rents may be hitting an affordability ceiling in some locations. It is an early warning of some overheating and, as well as raising demand in cheaper locations, it will force some to find alternatives such as stay with parents or squeeze more people into smaller spaces.”
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