Rent to income ratio

Telecaster

Telecaster

Telecaster

Soldato
Joined
17 Jun 2012
Posts
5,951
Is there a definitive number/formula for what you will be considered OK to rent?

I see various different ideas all over the place- unlike a mortgage with its 4.25x salary or whatever it is- rent seems to be a bit more of a grey area. I need to know what I can seriously consider because simply affording the monthly rent isn't a problem it's whether or not they'll consider me or whether I'm just wasting my time.
 
would depend on all your other outgoings tbf mate.

do your own affordability check :)

just stick yer income/outgoing into excel and adjust your rent to a point you think you would be happy/secure.

If you're wanting to buy eventually then have a few hundred left over and whack it into some kind of isa or higher interest account for now.
 
I don't think the checks done by letting agencies are really that in depth, more just a case of you have got a completely trashed credit rating with CCJs left right and centre.
 
throwaway4372 said:
only rent if you can't buy imo
if renting pay the minimum to save and buy asap
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Useful post, lol...

@Telecaster it is a grey area and there's no hard and fast rules. Seems the average is around 30% of monthly income.

Some mildly useful links; https://www.halifax.co.uk/mortgages/help-and-advice/renters/how-much-rent-can-i-afford.html
And https://www.nimblefins.co.uk/rent-affordability-calculator-uk

You really need to do a quick budget sheet including ALL outgoings, including a realistic budget for food and social activities. I'm sure there's a million threads on here, for what to include. Letting agents aren't going to care one diddly squat about what you can afford, it's not their problem.
 
My last rental contract wanted a guarantor if annual income was less than 30x the monthly rental - not that those checks give any consideration to existing credit commitments and if that's actually affordable...
 
Varwen said:
My last rental contract wanted a guarantor if annual income was less than 30x the monthly rental - not that those checks give any consideration to existing credit commitments and if that's actually affordable...
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Was going to post something similar. When we rented a flat there wasn't really a percentage of income minimum. But they did have a threshold which I think worked out about 20k (this was about 6-7 years ago mind) and if you were below it then you needed a guarantor.
 
I don't think its standardised; it's ultimately up to the landlord. When renting a few years ago my basic rule was to try & keep it under 25% of total monthly household take-home pay.
 
Tom_ed1987 said:
I don't think its standardised; it's ultimately up to the landlord. When renting a few years ago my basic rule was to try & keep it under 25% of total monthly household take-home pay.
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That would be unlikely and almost impossible for most people not in the north of England or Scotland. My rent is £650pm. For me that would mean a take home, in my pocket wage of nearly £2,600. I certainly don’t get that! Far from it!
 
Thanks for the posts sticking to the question I asked, I didn't think there was anything set in stone judging by how much some people spend on rent but I thought I'd ask.

I already rent and have done for years so I know what I can personally afford each month, it was whether or not some numpty wouldn't consider me purely based on some arbitrary number pulled out of their back side. If 30x rent to annual income is some kind of guide they use then I've nothing to worry about.
 
30x was the affordability check used by the estate agency managing the tenancy - they're one of the biggest round here (Cambridge), but they're not a national company or anything. I think it does tend to be set by the estate agency managing the contract, so you could always phone a couple of them and ask what the checks they use are if you wanted some certainty?
 
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