What is Affordability?

These are 2 words you may hear a lot when renting, you may have an understanding of these words already, or you may think, what are they talking about? I earn a good salary and I can afford the rent, I have budgeted well!

I thought the same when first renting. But agents have a criteria for affordability, based on your income. For you to rent a property, you have to pass affordability, agents are looking for you to be earning 2.5 times the annual rent, for example:

Annual rent of £9600 (monthly £800 pcm) x 2.5 = £24,000 income                       

If you do not meet this affordability then the agent will ask for a Guarantor, someone to pay the rent should you fail too. A guarantor must earn 3 x the yearly rent, for example:

Yearly Rent of £9600 x 3% = £28800 income

I hope this helps understand ‘What is Affordability’