Tenants now spend 32.7% of their annual income on rent, according to research published by Lomond, a figure that places average earners within touching distance of the affordability thresholds used by most mainstream referencing providers. Average monthly rent stands at £1,369, up 4.3% year-on-year, with London commanding £2,418 and regional markets including the North West (£1,215) and Yorkshire (£1,283) both recording 5% annual increases.
The data arrives as letting agents and landlords recalibrate tenant selection and retention strategies under the Renters' Rights Act, which abolished Section 21 and extended eviction timelines. At 32.7%, rent consumes a share of income that sits at the upper end of typical affordability criteria, creating a structural tension between landlord yield expectations and tenant qualification rates at precisely the moment poor tenant selection carries higher cost and longer resolution times.
Affordability thresholds tightening in practice
Most tenant referencing platforms apply affordability thresholds between 30% and 35% of gross income, with some requiring rent not to exceed 2.5 to 3 times monthly earnings. At 32.7%, the average tenant now operates within a narrow band where small income variations or rent increases can trigger referencing failures.
For agents conducting viewings and referencing in markets tracking close to the £1,369 national average, this creates an operational bind. Landlords pricing at market rate may face longer void periods as fewer applicants clear affordability checks, whilst those holding rents below £1,200 in the North West or Yorkshire may see relative demand advantage as tenants seek properties that preserve headroom against referencing criteria.
The lack of disclosed methodology matters here. If Lomond's data reflects household income rather than individual earnings, the 32.7% figure understates the affordability pressure on single-income tenants or those in lower-wage regions. If it samples only Lomond's managed portfolio, it likely excludes older stock, HMOs, and lower-cost lettings that make up substantial portions of regional PRS inventory.
Regional variation and demand signals
London's £2,418 average sits 76% above the national figure, a premium that requires household income exceeding £88,800 annually to meet a 32.7% ratio. That cohort exists, but the pool narrows sharply, explaining why agents in higher-value London markets report extended void periods and increased tenant negotiation on rent reviews.
Yorkshire and the North West both recorded 5% annual rent increases, outpacing the 4.3% national figure, yet remain materially cheaper in absolute terms. Yorkshire saw increased tenancy commencements in Q2 2026 versus Q2 2025, with two- and three-bedroom terraces and semi-detached homes most in demand. For agents in those regions, the dynamic is clearer: family-sized housing at sub-£1,300 monthly rent still clears affordability checks for dual-income households, sustaining turnover and instruction flow.
The average tenant age of 31.5 years warrants closer scrutiny. Scotland's figure of 25 years may reflect student concentrations or HMO stock rather than a genuine affordability divergence, but the national average suggests delayed household formation. Whether that reflects choice, affordability constraints, or lack of supply remains unresolved in Lomond's data.
What changes for tenant selection post-Section 21
The Renters' Rights Act removed Section 21 possession and extended statutory notice periods, making poor tenant selection costly and slow to remedy. Agents who previously relied on marginal affordability pass rates or guarantor arrangements now carry higher risk if a tenancy deteriorates, as eviction under Section 8 grounds requires evidenced breach and court processing times have lengthened.
Lomond's Chief Revenue Officer John Ennis frames the shift as tenants prioritising "long-term value" and landlords emphasising "sustainable, long-term tenancies." The evidence for preference shift is absent. Tenants may stay longer because moving costs have risen or supply constraints limit alternatives, not because priorities have changed. Landlords may avoid marginal applicants because regulatory risk has increased, not because they have embraced sustainability as a strategic goal.
For letting agents, the practical question is whether 32.7% rent-to-income ratios will rise, stabilise, or fall. If wage growth stalls and rents continue 4–5% annual increases, referencing pass rates will tighten further. If landlord exits accelerate and supply contracts, rent inflation may outpace income growth, pushing affordability ratios above 35% and into territory where only higher earners or multi-income households qualify.