London tenants are being forced to fork out more of their income on rents than ever before, but a few cheap corners can still be found, according to new data
Research on housing affordability by rental platform Ocasa has identified the cheapest postcodes across the capital with South Croydon (CR2) named the city’s most affordable destination.
Tenants in the Zone 5/6 patch covering Sanderstead and Selsdon, spend only 21 per cent of their average household income on rent a year (£15,024).
Any rental cost below 30 percent of a household income is considered “affordable”, according to the Office for National Statistics’ definition. Only a handful of London postcodes come in under this threshold.
The next cheapest postcode is in nearby Sutton, where the average annual rent is £15,468, working out at 26 per cent of the average household income (£59,300).
To the east in Bromley, annual rents inch upwards to £16,632, consuming a 27.5 per cent share of the average household income (£60,500).
The fifth cheapest area to rent is Ruislip in west London borough of Hillingdon, where the rents hit a yearly cost of £16,548, working out at 28 per cent of average income in the area.
Fuelled by an extreme shortage of housing stock and the spiralling cost of living, rents in the capital are now at a record high. Property site Rightmove has reported a 14.3 per cent leap in the first quarter of 2022, with the average rent now costing £2,193 per month.
Most affordable boroughs to rent in
Average rent per year
Average household income
While there are a few cheap pockets left in outer London areas, the research found that overall, London was the only ‘unaffordable’ region across England and Wales.
While the average London income is £54,194, rent consumes 40 per cent of this with an average annual bill of £21,439.
The most expensive postcodes for London renters
The top ten most expensive postcodes to rent across England and Wales are all in the capital’s central boroughs such as Westminster, Kensington and Chelsea and Camden, according to Ocasa’s data.
Top of the list is SW1 where 77 per cent of household income is spent on rental costs. Other postcodes with sky-high rents include Covent Garden and Leicester Square (WC1), where rent eats up 74 per cent of household income, and Kensington Gardens and Paddington (W2) where it costs 72 per cent.
Head of Sales and Marketing at Ocasa, Jack Godby, said: “Unsurprisingly London is home to some of the least affordable locations when it comes to rental affordability, with areas in Kensington and Westminster easily costing more than double in rent versus the most affordable London areas.“
Nevertheless, there are still some pockets that sit below the 30 per cent affordability threshold, and which offer the bright lights of London city living for a much more reasonable entry fee.”
Dan Wilson Craw, Deputy Director, Generation Rent, said: “London rents have been surging ever since offices and universities opened back up in late 2021. We’re seeing this globally, so it seems to be a post-pandemic issue. Yet many landlords are using it as an excuse to squeeze more rent out of their existing tenants.”
Craw added: “We need a rent freeze and pause on evictions while the cost of living crisis is raging. We need to build more homes to meet demand from people who need to live in London, and raise Local Housing Allowance while scrapping the benefit cap, so tenants on benefits can find somewhere to live.”