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.
This graphic, based on figures from the Nationwide building society, shows the unrelenting rise in price to earnings in London
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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Fantastic article, spot on this time. We MUST build more houses (not just in Croydon), but those that are affordable to those first time buying and on lower incomes. Croydon Council have spent all their energy on penalising existing Landlords, who are largely bone fide. Many of which assist the Council by renting properties to people that would otherwise be homeless, thus preventing more financial burden to this bankrupt organisation. Enforced Landlord Licensing by the Council has just contributed to these appalling rent projections as Landlords seek to recoup the tax the authority has imposed upon them by increasing the rent. Another job well done by Brother Newman and his crew. But they were warned this would happen and of course ignored it.
What is even more so utterly ridiculous is that those Landlords that already rented to those on Housing Benefit paid for by the Croydon Council were also charged the £750.00 licensing fees. Such Landlords had to go through intense scrutiny themselves to be eligible to let their properties to Council Tenants in the first place! And now find themselves responsible if the tenant behaves anti-socially. My advice to any private Landlord renting to the Croydon Council is to sell the property and evict the tenant using Section 21. Then we will really see chaos.
As the Festive Season approaches I am reminded of the most perfect role model Mr Ebenezer Scrooge and his views upon the situation.
“At this festive season of the year, Mr Scrooge, … it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.”
“Are there no prisons?”
“Plenty of prisons…”
“And the Union workhouses.” demanded Scrooge. “Are they still in operation?”
“Both very busy, sir…”
“Those who are badly off must go there.”
“Many can’t go there; and many would rather die.”
“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population.”
While I may profoundly disagree with Mr Scrooge as I belong to that wishy-washy class of person who imagines that there is such thing as society and an obligation to care for others, I do readily acknowledge that I am in a minority as the outcome of the last General Election demonstrates.
The nation voted for the market forces and the opportunity to make individual fortunes at the expense of the many, and this is something we must accept.
In the same way we must accept that the present government is committed to transfering funds from the working young to the economically inactive old to ensure that the older generation continues to vote Tory. By marginalising the young so they live either sofa-surfing or in short-lets, where they are less likely to register to vote, then we can all look forward more of the same.
I wish you all a Merry Christmas (if you can afford it and deserve it!) and a lucrative New Year