In this month’s Market Mover, CEO Gavriel talks through the new affordability matrix released on the REalyse platform and demonstrates how to use the feature to find some potential development opportunities.
Read time: 2 minutes
We released the affordability matrix earlier this year in the REalyse platform. The idea of this particular feature is to help companies understand the cost of owning a home with a mortgage vs. the cost of renting as a proportion of income, relative to the number of income earners and bedrooms for a typical property in a specific area.
These affordability matrices are often very time-consuming to put together manually and was one of the many client requests that we have implemented this year. Picking at random the location of Hyde Park Corner as an example, you can see in the table below that, for an average person earning an average income in that location, residents will be spending about 40.8% of their gross income on rent. If there are two earners in that property, then it falls to 20%. And so on and so forth.
While incredibly useful in itself, what is also interesting is to see how affordability has changed across London between 2015 and 2019.
While the pattern is generally similar across the capital city, you can see just from the heatmap that the amount of income spent on rent has increased in many locations.
Affordability in 2015:
Affordability in 2019:
Areas such as Willesdon, Tottenham, Bellingham and Hainault (the areas circled in green) have had their rental costs relative to income increase significantly. Interestingly, the area around Wapping, Southwark and the Isle of Dogs (circled in red) have not had significant increases in rents relative to income and remain comparatively ‘cool’ on the heatmap.
Perhaps there’s an opportunity to be had there for renters and developers alike.
Want to be first in the know on updates like the REalyse affordability matrix? Sign up to a trial of the REalyse platform here.
© Treex 2020