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Rents and affordability

Key points

  • There is a huge range of rent levels across London. Kensington & Chelsea and Westminster stand out with lower quartile monthly rent for a 2 bedroom property exceeding £2,000, but excluding these two areas rents range from over £1,700 per month in Camden to £825 in Havering.
  • In Westminster and Kensington & Chelsea the lower quartile rent is higher than the lower quartile earnings of a full-time worker. There are only 5 boroughs where the rent is less than half of lower quartile earnings.

Rent as a proportion of lower quartile monthly gross earnings

What does this graph show?

This graph shows how rents in London vary and how this compares to earnings. The bars show monthly rent levels for a 2 bedroom property and the line shows this as a percentage of full-time earnings in the borough. Given the focus on those at the bottom of the income distribution rather than the average we look at the lower quartile for both earnings and rents.

The graph shows that there is a huge range of rent levels across London. Kensington & Chelsea and Westminster stand out with lower quartile monthly rents exceeding £2,000, but excluding these two areas rents range from over £1,700 per month in Camden to £825 in Havering.

The line shows how this compares to the gross monthly earnings of a full-time worker in each borough (on the right axis). In Westminster and Kensington & Chelsea the lower quartile rent is higher than lower quartile earnings. There are only 5 boroughs where the rent is less than half earnings.

However, this graph only offers an indication of "affordability" as the number of earners and the space requirements of each household will vary. For example, working single parents will be the sole earner in a family requiring two or more bedrooms, whilst a couple without children could have two earners and require one bedroom. The GLA assesses a household as being able to afford private rented housing if the lower quartile rent for the required number of bedrooms is less than 25% of gross household income.

The graph is ordered in line with this ratio of earnings to rent. It shows that this ratio tends to be higher where rents are higher. But it also shows that Brent and Haringey have quite high ratios given the rent level suggesting that earnings in these boroughs are low relative to the housing costs there. This is also the case in Enfield, Waltham Forest and Newham.

Data used

Private Rental Market Statistics 2014/15, VOA; ASHE 2014, ONS (via NOMIS).

Indicator last updated: 20 October 2015