How much rent you can afford depends on a lot of factors. These can include what you earn, your lifestyle and other expenses you have. For some people, paying a little more rent is worth it if they can walk to work or reach their favourite park within minutes.
According to NimbleFins, the average household in the UK pays £868 a month to rent a property. But just how affordable is this average amount?
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What percentage of your salary should go to rent?
The generally accepted rule is that you should spend no more than 30% of your salary on rent. And according to the ONS Family Spending report, Brits spend just about that, with most spending around 30-35% of their salary.
How much rent people can afford has changed over the years. In fact, the average figure has been increasing steadily over the past decade. Twenty years ago, the average UK resident spent about 28% of their salary on rent. Though places like London have always had higher percentages, at around 40% or more.
How do you calculate whether you can afford rent?
To see how much rent you can afford, you first need to add up all of your existing expenses. Estimating the cost of your bills and daily expenses will give you an idea of what’s left for rent.
This includes service charges, council tax and utilities. You can ask the landlord of the property you’re considering to estimate how much these things might cost. Or you can set aside a certain amount for the first few months until you get a bill.
If you’re still unsure about how much rent you can afford, then try using a rent affordability calculator. This allows you to enter your gross annual income to see how much rent you can afford. Or you can enter the rental price of a place you’re considering. In this case, the calculator will estimate how much your gross total income should be to afford that place.
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What other rent-related points should I consider?
One of the requirements of renting a house is paying a deposit. A deposit could be equal to one or two months’ rent, so when trying to figure how much rent you can afford, keep this extra money you need to come up with in mind.
Another thing you should keep in mind is that landlords might ask for proof of your income to check that you can afford the rent they are charging. For example, you might feel you can afford a place that swallows up to 50% of your salary, but that doesn’t mean the landlord will think it’s a good risk to rent it to you.
Landlords can ask to see your payslips, a letter from your employer, your bank statements or your most recent tax return to confirm that you are earning enough. To improve your chances of getting the place you want, try to stay as close as possible to the 30% figure mentioned above.
