The improvement, however, has been driven by wage growth rather than any slowdown in rental costs

Renters across Great Britain are spending a smaller share of their income on rent than a year ago, but affordability pressures remain acute across much of the country, according to new research from property technology company Dwelly.

The data shows renters now spend 40.9% of their income on rent, down from 41.5% the previous year. Across England, the figure sits slightly higher at 41.6%, easing from 42.2%. The improvement, however, has been driven by wage growth rather than any slowdown in rental costs. Rents across Great Britain rose 3.9% over the past year, while earnings increased at a faster 5.4%.

At a regional level, the picture is uneven. London recorded the sharpest reduction in the proportion of income needed to cover rent, falling by 2.33 percentage points, as earnings grew 6.9% against rental growth of just 2.1%.

In contrast, rental growth has outpaced or matched wage growth across several regions, pushing affordability in the wrong direction. The North East recorded the steepest deterioration, with rents rising 7.9% against earnings growth of just 4.4%, resulting in a 0.87 percentage point increase in the income share required to cover rent.

The North West followed a similar pattern, with rental growth of 6.1% outstripping earnings growth of 4.2%, pushing the figure up by 0.55 percentage points.

On the face of it, a reduction in the proportion of income required to cover rent is positive, but it’s important to understand what’s driving it, said Sam Humphreys, head of M&A at Dwelly. In many cases, this improvement is down to stronger wage growth rather than any meaningful reduction in rental costs, and it’s also being seen in areas that remain some of the least affordable when you look at the overall share of income required.

At the same time, the more affordable regions are now seeing the strongest increases in the proportion of income needed to rent, which shows that affordability pressures are still building across much of the country, he said.

He added: So, while there are some encouraging signs, the reality is that more needs to be done to improve affordability, particularly as further legislative changes through the Renters’ Rights Act begin to take effect and increase the cost and resource required to manage rental properties.