How Much Rent Can I Afford?

Renting is a big responsibility when it comes to your bank balance, as it’s not just rent you have to pay, there are many other costs involved. Your salary, the area you live in, and other factors will all affect how much rent you can afford. To help you budget, here’s a handy guide.

What rent can I afford?

To decide this, you need to factor in:

• The estimated cost of bills
  • Utilities 
  • WiFi
  • Water
  • Council tax
  • TV license
• Living expenses
  • Transport
  • Food/drink 
  • Other
• Your salary
• Rent deposit
• Any moving costs 
• Furniture 

As a rough estimate, a landlord/letting agent may expect you to earn around 2.5x the rental amount. This isn’t a universal rule, but a ballpark figure. 

How much of my salary should go on rent?

This will largely be governed by where you live. 

The 30% rule of thumb dictates that you should spend no more than 30% of your salary on rent each month. This does not take into account the other costs mentioned above. The ONS deems a property affordable if a household would spend 30% or less of their income on rent.

Let’s take the average full-time UK salary of £31,285 (as of 2021). 30% = £782 (a month). 

However, in some areas, tenants spend less than 20% of their salary on rent, while in some sought-after areas, such as well-connected cities like London, this can rise to over 40%. Also, depending on how high your income is, rent could eat into it.

How much rent can I afford?

Budgeting is absolutely key when it comes to achieving financial health when renting. You’ll want a good idea of your spending habits, where your money goes, and how much you typically spend each month.

It’s important not just to look at rent alone. As mentioned, there are other costs involved, and bills will be a big part of this. Unless you have bills included in your tenancy agreement, you’ll be expected to pay bills when renting. 

Average bills

The UK average dual fuel bill is currently £1,131 a year (£94.35 a month) and the average broadband bill is £27.39. Meanwhile, Water UK estimates that the average water and sewerage bill is £396.60 a year (£33.05 a month). Of course, this can be higher or lower depending on where you live. 

Look at your monthly take-home, and try to budget what you’ll need to rent. Bear in mind it’s worth having some leftover money to set aside each month, whether to save, or for other expenses, such as holidays.

It’s important you always pay your bills on time, or it could hurt your credit profile.

Check Your Credit Score

How to save while renting

A hurdle many renters face is saving while renting, and it’s little wonder why. But, it can be done! Some tips include:

1. Renting in a suburb rather than a city
2. Setting a weekly, or monthly, budget and sticking to it
3. Being more savvy when shopping
   1. The average family throws away £60 of good food a month – only buy what you need!
4. Saving energy at home
   1. Turning off appliances
   2. Getting energy-saving bulbs
   3. Using less water
5. Switching energy providers 

If you pay your utility bills, you have the right to choose your provider. Switching energy suppliers could help you save each month. Many tenants are on their provider’s standard tariff, which is usually the most expensive. But, you don’t have to be! Find a deal below.

Switch Energy Supplier

Last Updated: November 1st, 2024