The average rent for a two-bed home in London will hit £2,007 a month by January 2020 if rents continue to rise at their current pace, according to research by a London Assembly member. That would mean that in little more than four years’ time, a single-earner household would need to earn almost £120,000 a year for their rent to be affordable by 2020.
Londoners are being priced out of London, a social cleansing being affected through economic means, the sort of thing which was “celebrated” at this week’s Develop Croydon Conference held for property speculators.
Analysis of Valuation Office Agency data by Tom Copley, Labour’s London Assembly housing spokesman, has found that the average private rent for a two-bedroom home in London grew by 0.42 per cent a month between November 2004 to March 2015. That means that the average rent for a two-bed London home in 2015 is now £7,700 a year more than in November 2004.
Modelling, based on the average rate of rent inflation over the past 11 years found that if the rate of rent growth continues, the average two-bed private rent in London will hit £2,007 a month in January 2020. One-bedroom properties could reach £2,010 by 2025.
Copley believes that his research demonstrates that London’s next Mayor needs to look at establishing rent-capping powers. “There’s no way that rents consistently rising faster than wages is sustainable in the long term,” Copley said.
Assuming housing charity Shelter’s rule that a household should not spend more than one-third of their net income on rent, Copley estimates that by 2020 a single-earner household would need a pre-tax salary of £118,240 just to afford the average two-bed flat in the capital. If the rent was split evenly between two earners, each would need a salary of £49,655 per year. The median London income today is £35,069.
Average private rents for three- and four-bedroom homes in London have already broken the £2,000 barrier but if the trend continues, by 2025 a privately rented three-bed home in the capital would cost £3,531 a month, with four-bed properties on average costing £5,606.
“These figures show just how broken the London rental market has become. We desperately need to call time on ever-increasing rents, which are driving many people into poverty or out of the capital altogether.
“Most other western economies exercise some form of regulation over rent increases, many of which have much larger and better functioning private rented sectors than we do in London. With the number of private renters in the capital due to overtake the number of home owners, it’s about time the capital followed suit and gave private tenants the security and certainty that they deserve,” Copley said.
“The next Mayor of London has a mammoth task to get London’s housing market under control. What’s clear is that Boris Johnson’s soft touch approach to housing has seen rents rocket and standards deteriorate, pricing many low and middle-income people out of the capital.”
In the meantime, in the 18 months since Labour took control of Croydon Town Hall, the council has managed to build a grand total of 12 (yes, 12) new homes to address the housing crisis in the borough.
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