Spending three-quarters of your income on rent?
21st Jul 2015
One of the biggest bills in your household budget is probably your rent or mortgage payment. If you’re a renter, this probably takes up a good chunk of your income and if it comes out at the start of the month, it can seem like a long time until you get paid.
According to figures released last week, on average tenants in London put a massive 72% of their earnings towards their rent, meaning the majority of their pay goes on one bill. For the rest of the UK, the situation was nearly as bad, with rents accounting for almost half of tenants’ wages.
While it’s true that people living and working in London are likely to be earning more, it seems their rent is disproportionately higher. With a rent bill at nearly three-quarters of what Londoners take home, it leaves very little left over to put towards any of the other bills. In fact, paying out that much of your income in rent is unlikely to be financially sustainable for any length of time.
If you’re a renter in London, this can make saving up for a deposit on a place of your own pretty much impossible. According to research carried out for us last year, renters living in Chelsea spend almost £3,260 a month on living costs, with those in Westminster spending almost £3,075 every month. Whilst of course these are the priciest areas of the capital to rent, it’s clear that rent is a big issue for Londoners.
How to save on rent in London
1) Move further out: just because you work in Zone 1 doesn’t mean you need to live there. By moving out of the city and getting the Tube in, you could save hundreds of pounds of every month. For example, moving from Islington to Dagenham could save you over £1,000 in living expenses every month – and you’d only have to pay an extra £90 for your Tube season ticket. Don’t limit yourself to the tube map either – there’s a huge part of the South East within an hour on the train from London.
2) Find a cheap area: some areas of London are cheaper to live in than others. Hillingdon, Dagenham and Bexley are the cheapest areas to live in according to our research, so see if you can find any flats to rent in these places.
3) Find people to share with: it’s cheaper (and much friendlier) to rent somewhere with other people, so think about moving in with friends to split the bills. If you’re new to London and you don’t know anyone, check out Spare Room to find yourself a new flatmate.
4) Property guardian: you could save money by becoming a live-in guardian for someone else’s property. By looking after their apartment or house when they’re not there, you could pay rent at a reduced rate, around £400 in London. You’ll have to pay a deposit and be responsible for keeping the property clean and tidy, but it’s worth it for how much you’ll be saving. Check out Camelot if you’re interested.
5) Switch bills: even though you’re renting, don’t feel that you have to stay on the energy bills that were set up when you moved into the flat. You can still see if you could be saving with another energy supplier, so check out a comparison site to see if there’s a better deal for you.
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