Rent % of income question

Anthorn

jordon1703 wrote: »

Hi all,

After considering all known outgoings and working out my maximum comfortable rent allowance, I have decided that I'd be able to afford up to £1100pcm; I'll have ~£200 left at the end of each money to save/spend some on a night out etc. So I'm looking for flats between £900 and £1100pcm.

I've heard online that you should be spending, as a general rule of thumb, 30% of your income on rent - but, based on calculations, £1100 is 36% of my income before tax, and 47% of my income after tax.

Is this too much? Am I being silly to even question this as I have worked it out quite thoroughly?


Thankyou!

Are you referring to the campaign started by Lord Bird in the House of Lords in which credit rating agencies are asked to take account of rent paid as a means of ensuring that tenants are reasonably safe to rent to? c.f. link below. So therefore what is proposed is that it's not a case of the percentage of income paid in rent but that rent forms part of the credit history.

As far as I understand it that 30% figure comes mainly from the U.S. and not from the U.K. For example people living in London pay 49% of salary on rent whereas people living in the North East pay half that. So in the U.K. what is paid and therefore what is acceptable varies according to the area of the country.

http://www.bbc.co.uk/news/business-42179119