Wage growth makes London’s rents more affordable

The average tenant spends roughly half their monthly income on rent despite a year-on-year improvement across the Capital, according to Benham and Reeves boss Marc von Grundherr.

Rent takes up around 50% of the average Londoner’s income each month, although strong wage growth means affordability has improved since 2024, according to new research by lettings and estate agent Benham and Reeves.

The firm analysed average monthly earnings as a proportion of average rent to understand how much of their income tenants are now spending on their housing costs.

In London, average monthly earnings are £4,586, with an average rent of £2,268, which means renters are spending 49.5% of their income on their home.

The proportion, however, climbs as high as 60.6% in Hackney, where average monthly earnings are £4,253, and rents are £2,578. Haringey is next at 58.7%, with Barking & Dagenham at 56.8%, in Ealing the figure is 54.6%, in Hounslow it’s 53.3%, and Brent is 53.1%. Newham (52.1%), Southwark (50.3%), Enfield (49.8%) and Lambeth (48.1%) are all close to the capital’s average.

The data show that rent, though, has been reducing as a proportion of income since 2024. London-wide, the share has fallen by 2.3%, with a number of boroughs seeing even larger drops. Wandsworth saw a 8.7% fall, while Camden and Harrow both saw reductions of 7.9%, followed by Hammersmith & Fulham with 7.8% and Tower Hamlets at 5.6%.

What our research clearly shows is that the situation is starting to move in the right direction.”

Not every borough has become more affordable. Ealing has seen a 3.4% rise in its rent to income ratio, in Haringey there has been a 3.3% rise, in Bexley it was 2.8%, it was 2.7% in Richmond upon Thames, and 2% in Enfield.

Von Grundherr says: “There’s no question that London remains an expensive city for renters and, for many people, the cost of housing still takes up a significant share of monthly income.

“However, what our research clearly shows is that the situation is starting to move in the right direction… rising earnings are helping to ease some of the pressure on renters and providing a more positive outlook than we saw this time last year.”