Furloughed tenants in London spending 82% of income on rent

The continued level of unaffordability for tenants in London has been revealed by lettings and estate agent Benham Reeves, as the furlough scheme is extended.

Research from the agent shows the average London tenant was paying £1,644 a month in rent prior to the pandemic. They also earned an average net salary of £2,639, meaning 62% of their monthly salary was required to cover rent costs.

Under the latest version of the furlough scheme, which is a return to previous lockdown furlough scheme, employees will receive 80% of their current salary, up to a maximum of £2,500. As a result, London tenants who have been furloughed are seeing their net monthly income reduce to £2,003. This results in the average cost of rent requiring 82% of their monthly pay – a 20% jump compared to before the pandemic.

On top of this, Benham and Reeves also points out that in some boroughs the level of income required to cover rent costs for those on furlough has already exceeded 100%.

The London agent uses Westminster as an example. Here, the research shows that the average tenant surviving on furlough will see their monthly net income reduce from £4,038 to £2,003. Prior to the pandemic, 75% of monthly earnings were required to cover the average rent of £3,046 in the borough but tenants on furlough have seen this climb to 152%.

Tenants in Kensington and Chelsea, Camden, Hammersmith and Fulham and Islington have also seen the average cost of renting exceed 100% of the average income for an employee on furlough.

Marc von Grundherr, Director of Benham and Reeves, comments: “The outlook for London’s tenants is a tough one at present with a second national lockdown preventing many returning to work fully, if at all, while still having the struggle of paying rent and other monthly outgoings.

“While the Government has introduced a number of schemes to help lighten this financial burden it’s unlikely to be enough with many seeing the cost of rent alone swallowing the majority, if not all, of their monthly income.

“Of course, there will be those in a better position than the average tenant but it’s important to note that there will be many more that are worse off and facing an even tougher task.”

The average net monthly income in each borough, how this has changed for those on furlough, and the percentage of both required to cover the average monthly rent.

Location	Average Rent pm	Pre-Pandemic	With Furlough Scheme in Place
Average NET Salary pm	Rent as % of NET salary	Furlough net salary – including cap due to gov max contribution	Rent as % of NET furlough salary
Westminster	£3,046	£4,038	75%	£2,003	152%
Kensington and Chelsea	£3,023	£5,218	58%	£2,003	151%
Camden	£2,302	£3,387	68%	£2,003	115%
Hammersmith and Fulham	£2,117	£3,209	66%	£2,003	106%
Islington	£2,003	£3,195	63%	£2,003	100%
Wandsworth	£1,958	£3,399	58%	£2,003	98%
Lambeth	£1,908	£2,565	74%	£2,003	95%
Hackney	£1,842	£2,360	78%	£1,949	95%
Tower Hamlets	£1,835	£3,162	58%	£2,003	92%
Richmond upon Thames	£1,835	£3,769	49%	£2,003	92%
Newham	£1,453	£2,007	72%	£1,667	87%
Haringey	£1,669	£2,350	71%	£1,941	86%
Southwark	£1,718	£2,717	63%	£2,003	86%
Brent	£1,502	£2,217	68%	£1,834	82%
Merton	£1,640	£2,799	59%	£2,003	82%
Barking and Dagenham	£1,208	£1,816	67%	£1,514	80%
Ealing	£1,569	£2,431	65%	£2,003	78%
Barnet	£1,499	£2,498	60%	£2,003	75%
Enfield	£1,292	£2,115	61%	£1,753	74%
Greenwich	£1,476	£2,650	56%	£2,003	74%
Hounslow	£1,352	£2,261	60%	£1,869	72%
Waltham Forest	£1,352	£2,277	59%	£1,882	72%
Harrow	£1,387	£2,370	59%	£1,956	71%
Lewisham	£1,316	£2,319	57%	£1,916	69%
Hillingdon	£1,200	£2,111	57%	£1,750	69%
Redbridge	£1,311	£2,378	55%	£1,963	67%
Bromley	£1,307	£2,787	47%	£2,003	65%
Kingston upon Thames	£1,306	£2,782	47%	£2,003	65%
Havering	£1,169	£2,311	51%	£1,910	61%
Croydon	£1,140	£2,268	50%	£1,875	61%
Sutton	£1,151	£2,336	49%	£1,929	60%
Bexley	£1,092	£2,358	46%	£1,947	56%
LONDON	£1,644	£2,639	62%	£2,003	82%
United Kingdom	£987	£2,039	48%	£1,692	58%
Sources	ONS	ONS		gov.uk