According to official statistics, average private rental prices across the UK have risen significantly over the past decade. While average household incomes have also increased, the rate of growth has varied widely by region. Economists often measure rental affordability using the rent-to-income ratio, but some argue that a true measure of affordability must also take general price inflation into account, as this determines the purchasing power of residual household income.
Table 1: Private rental affordability indicators in selected UK regions, 2012 and 2022
| Region | Year | Average Monthly Rent (£) | Average Monthly Household Income (£) | Rent as a % of Income | Consumer Price Index (CPI) (2012 = 100) |
|---|---|---|---|---|---|
| London | 2012 | 1,200 | 3,200 | 37.5% | 100.0 |
| 2022 | 1,850 | 4,100 | 45.1% | 125.6 | |
| North West | 2012 | 550 | 2,100 | 26.2% | 100.0 |
| 2022 | 780 | 2,650 | 29.4% | 125.6 | |
| South West | 2012 | 680 | 2,300 | 29.6% | 100.0 |
| 2022 | 950 | 2,900 | 32.8% | 125.6 | |
| UK Average | 2012 | 720 | 2,450 | 29.4% | 100.0 |
| 2022 | 1,050 | 3,100 | 33.9% | 125.6 |
Using the data in Extract C, assess the extent to which private renting in the UK was more affordable in 2012 than it was in 2022.
187 exam-style questions on AQA A Level Economics 2.1 The measurement of macroeconomic performance, covering 2.1.1 The objectives of government economic policy, 2.1.2 Macroeconomic indicators, 2.1.3 Uses of index numbers, and 2.1.4 Uses of national income data (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.