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How much can you afford to rent?

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last updated: 26 May 2016 report a problem

how much can you afford to rent

We all know that renting in the UK is becoming increasingly tough financially, which is why knowing how much you can comfortably afford without putting too much of a squeeze on your monthly budget is key. Although the various factors involved in this decision vary from area to area there are a few common themes that it’s worth bearing in mind. We’ve done a bit of research on your behalf and produced a quick guide to working out how much you can afford to rent.

Choose your area carefully. If you have a choice over where in the UK you live then remember that there are some parts of the country that are vastly more expensive than others. Esher in Surrey has been identified as the most expensive place to rent (average £2,000 a month) outside of London, as are many other southeast towns such as Weybridge, Marlow, Ascot, Windsor and Henley-on-Thames. Plymouth, Cardiff and Leeds were identified in a Homelet survey in 2014 as the least expensive cities and Edinburgh and Birmingham join London as the most expensive.

Factor in rent rises. A survey in April of this year by estate agents Your Move and Reeds Rains found that rents were up 4.6% last April on the year before, which is the fastest rise since 2010. Rent increases are not forecast to slow down so need to be factored into any budget you make when working out affordability. A 4-5% raise is a good average to take per year.

What’s the cheapest way for you to rent? This will depend on your circumstances to a certain extent but you have several options when it comes to renting. If you can’t afford to live alone and cover the rent and bills then consider taking a flat with an extra room and finding someone to share it with you. A house share is often the cheapest way to rent or you may even be better off as a lodger or subtenant – although bear in mind that lodgers and subtenants have fewer rights than tenants.

What makes you a good tenant? There are around 13 tenants applying for every flat that comes on to the market in London so it’s worth bearing in mind that this is a highly competitive market. Landlords have a lot of choice and are generally looking for tenants who will pay rent, leave the property in good condition and not annoy the neighbours. So you will need to pass a credit check and have references from a previous landlord at the very least. Factors that could influence a landlord might be: pets, children, not having a job – if you’re applying to rent with any of these bear in mind you might have to provide extras, in the form of a pet deposit or offering six months rent up front or a guarantor to make your application more convincing.

The extras. Renting isn’t just about the rent itself as the cost can vary with a number of other factors. Bills and council tax are the biggest influence on cost here and you should investigate these before you settle on an area as they can vary wildly – residents of Westminster in London, for example, pay the least council tax while those in Weymouth & Portland pay some of the highest bills.

If you still need a little help working out your affordability then the BBC has quite a useful tool that shows you where in the country is best for you.

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