How much rent can I afford?
🕑 6 minute read
As a renter, spending too much money on rent each month isn’t a good situation to be in.
As well as rent, you’ll need money for bills, savings, food and other monthly outgoings – while having enough spare to enjoy yourself.
For first-time renters, it is sometimes difficult to understand how much everything will cost. At Halifax, we want to ensure everyone is financially comfortable. This is why we’ve got some advice and tips on how much of your salary should be spent on rent, how to budget and ways to reduce rental costs.


How much of my salary should be spent on rent?
How much you want to spend on rent is ultimately up to you, but making sure you’re able to comfortably afford your monthly outgoings is key.
How much you’ll spend on rent can vary, depending on where you live.
According to the ONS, a person on a median income can expect to pay around 30% of their income on private rent – or more in London.
We used 35-45% of your take home pay as a guide, so you can see the higher end of the spectrum, when it comes to rental costs.
Highest monthly rent |
Monthly salary (Apprx. after tax) |
---|---|
Highest monthly rent£420 - £540 |
Monthly salary (Apprx. after tax)£1200 |
Highest monthly rent£455 - £585 |
Monthly salary (Apprx. after tax)£1300 |
Highest monthly rent£490 - £630 |
Monthly salary (Apprx. after tax)£1400 |
Highest monthly rent£525 - £675 |
Monthly salary (Apprx. after tax)£1500 |
Highest monthly rent£560 - £720 |
Monthly salary (Apprx. after tax)£1600 |
Highest monthly rent£595 - £765 |
Monthly salary (Apprx. after tax)£1700 |
Highest monthly rent£630 - £810 |
Monthly salary (Apprx. after tax)£1800 |
Highest monthly rent£665 - £855 |
Monthly salary (Apprx. after tax)£1900 |
Highest monthly rent£700 - £900 |
Monthly salary (Apprx. after tax)£2000 |
Highest monthly rent£735 - £945 |
Monthly salary (Apprx. after tax)£2100 |
Highest monthly rent£770 - £990 |
Monthly salary (Apprx. after tax)£2200 |
Highest monthly rent£805 - £1035 |
Monthly salary (Apprx. after tax)£2300 |
Highest monthly rent£840 - £1080 |
Monthly salary (Apprx. after tax)£2400 |
Highest monthly rent£875 - £1125 |
Monthly salary (Apprx. after tax)£2500 |
How to create a budget for rent
Working out your monthly outgoings can help you to understand how much you can afford to spare for rent.
Create a monthly budget
To begin, create a budget, including food, travel, social, subscriptions, savings and bills.
Bills should include council tax and utilities like energy and water, TV licence, broadband and digital TV services and insurance.
Factor in bill changes
Remember that bills are not automatically the same when you move – council tax may increase or decrease, as will energy and transport costs.
You can also ask the landlord or letting agent if they have an idea of the costs for bills in your area. They will probably have an average amount that they can provide.
Deduct these from your post-tax wage
Subtract these outgoings from your after-tax wage. From the amount left, figure out how much you could afford to spend on rent and how much you can put into your savings.
Always leave spare money for emergencies or seasonal costs (think birthday presents, weddings, Christmas).
Way you might be able to reduce your rental costs
If you’ve worked out a budget and know your top end for spending on rent, you might not be able to live exactly where you imagined.
The following might help when looking for a home to rent using your new budget:
- Be flexible.
Being flexible about the location or choose a different style of property can help you get more for your money. For example, you may have planned on living in a house, but there could be a decent flat in your price range. - Find somewhere a little further out.
Looking a bit further out of the centre of a city or town can sometimes be cheaper. - Live in a shared house.
For first-time renters, moving into a shared home can be a simple way to save money on rent. It’s also an excellent way for people moving to a new place to make friends. It’s a good idea to visit and speak to your housemates before moving in, so you can make sure you all get along. - Move in a partner or friend.
Splitting the cost of rent with a partner or friend can make it a lot cheaper and open up more options. Splitting household bills will also cut down on living costs.
How much does renting in London cost?
The average cost for rent in London is generally higher than the rest of the country. By living in one of London’s more central boroughs, you might pay upwards of £1,500 in rent (PDF, 5.3 MB) per month.
The cheapest place in London to live is Croydon, with the average rent being charged at £1,167 per month. The most expensive is Westminster, with the average rent being charged at £2,491 per month.
Flat sharing is common in London, as is living further out and commuting in for work. If you move outside of the London Borough areas, remember to factor transport costs into your monthly budget – it could be cheaper to pay more for rent, but less on public transport.
What does PCM mean when renting?
When looking for rental properties, you might notice the terms PCM or PW in listings, here’s what they both mean:
PCM definition
PCM stands for per calendar month, so this is the cost of the property each month. You can usually arrange a day to pay that suits you with the landlord – to coincide with your payday, for example.
PW definition
PW stands for per week. This is commonly used for social housing and student housing. The landlord or letting agent should offer the price per week and calendar month, so you know the total amount.
These two terms are helpful to know when renting, so you know how much you’ll be paying and when.
Find and apply for the right mortgage with a little help from us. Whether you want to take that first step or plan your next move, your search starts here.