Rental affordability index

Using Government data, Paragon’s Rental Affordability Index compares the average percentage of annual salary spent on rental payments to reveal an average rental affordability ratio.

The index aims to assist landlords in making strategic buy-to-let investments and setting appropriate rent levels whilst helping tenants to identify the most affordable areas to rent. The index highlights that across England, the average salary of £31,220 equated to 32.8% of the average rent.

Regionally, the most affordable regions were all located in the north of England, with the North West coming out as the most affordable at 23.7%, followed by the North East (24%) and Yorkshire & Humber (24.3). London (51.3%), the South East (36.1%) and East of England (32.4%) were the least affordable.

Richard Rowntree, Paragon Bank Managing Director of Mortgages, said:

"These figures paint a revealing picture, with the most affordable rental locations mainly concentrated in northern areas. House prices are typically lower in these regions, meaning that rents tend to be lower. At the other end of the scale, it is not surprising to see London as home to the least affordable locations and that is why London has the highest proportion of house sharers in the UK.”

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551