Affordable accommodation in the private rental sector (PRS) has become scarcer over the past five years with UK rents rising 10%, yet tenants’ accommodation budgets have fallen by 0.5% according to Spareroom.

Average (room) rents in London have increased by 25.8% in the five year period with tenant’s budgets rising by 10.4%; this compares with the worse areas of the UK, Yorkshire & Humberside and Scotland, where rents have risen by 11.3% and 24.2% respectively, yet budgets have decreased by 16.5% and 21.8%.

Matt Hutchinson, director of SpareRoom.co.uk, said: “What’s clear is that affordable rents are becoming ever more scarce. Many people are still struggling with the cost of living and this isn't being helped by the fact that wage growth is the lowest since records began.

“The problem is we have a chronic shortage of housing in the areas where jobs are being created, so rents continue to rise as supply fails to meet demand. In some areas of the capital we’re seeing up to 13 people compete for every room advertised.

“The only obvious short-term solution is to encourage more homeowners to let their spare bedrooms and create supply. To do that, the ‘Rent A Room Scheme’ tax-free threshold needs to be raised to act as a proper incentive. It hasn’t been increased since 1997 and rents have risen by 103% in that time. Not only will this benefit renters, it could stop thousands of homeowners slipping into arrears when interest rates finally rise.”

Northern Ireland has seen the slowest rental increases over the five year period at 10%, yet tenants’ budgets for accommodation have dropped 5%.

Over the past 12 months Scotland and London have become the least affordable areas as rents in Scotland have risen by 9.9%, twice as fast as budgets at 5.1%, whilst in London rents have increased by 5.1% with budgets only increasing by 3%. Wales is the most affordable location as budget increases at 4% are more than twice rent rises at only 1.7%.