There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades, says GMB London
A new study by GMB of official data shows that between 2011 and 2018 rent prices for 2 bedroom flats in London increased by 21.7% to an average of £1,450 per month, whilst over the same period, monthly earnings increased by just 9.1%.
In London, Greenwich is the borough that has seen the biggest rise in rent. Between 2011 and 2018 rent of a 2 bedroom flat increased by 50%, to an average rent of £1,350 per month. Meanwhile, wages in the borough increased by just 7.2%.
Other London boroughs with a significant gap between pay-rises and rent are; Lewisham, where rent increased by 47.4%, yet wages have increased by just 16.8%; Newham, where rent increased by 47.4%, yet wages have increased by just 9.5%; Barking and Dagenham, where rent has increased by 45.5%, yet wages by just 16.4%; Waltham Forest, where rent has increased by 42.9% since 2011, and wages have increased by 16.1%; and Croydon, where rent for a two-bedroom flat has increased by 41.2% to an average of £1,200 per month, whilst wages have increased by just 11.7%.
The figures for the 33 London boroughs are set out in the table below. This is from a new study by GMB London Region of official data from the Office of National Statistics (ONS) for 33 boroughs in London. It shows the median rent of a 2-bedroom flat in 2018, the percentage change in rent-prices between 2011 and 2018, and the percentage change in monthly earnings between the 2011 and 2018.
Rank
Boroughs
Two bedroom median rent 2018
% change in rent 2011-2018
% change in monthly earnings 2011-2018
LONDON
1450
21.7
9.1
1
Greenwich
1350
50.0
7.2
2
Lewisham
1400
47.4
16.8
3
Newham
1400
47.4
9.5
4
Barking and Dagenham
1200
45.5
16.4
5
Waltham Forest
1300
42.9
16.1
6
Croydon
1200
41.2
11.7
7
Sutton
1175
38.2
10.3
8
Hillingdon
1250
35.1
3.2
9
Harrow
1300
33.3
10.4
10
Bromley
1200
33.3
18.7
11
Redbridge
1200
33.3
3.3
12
Havering
1100
33.3
9.2
13
Ealing
1447
31.5
8.6
14
Enfield
1300
30.0
6.5
15
Bexley
1025
28.9
4.1
16
Merton
1410
28.2
7.8
17
Lambeth
1582
28.1
0.8
18
Hounslow
1275
27.5
8.6
19
Kingston upon Thames
1350
26.5
8.5
20
Hackney
1690
25.8
7.7
21
Richmond upon Thames
1540
20.8
-0.8
22
Southwark
1560
20.0
5.0
23
Barnet
1352
20.0
15.2
24
Haringey
1450
19.5
9.0
25
Wandsworth
1650
19.0
9.6
26
Tower Hamlets
1700
18.9
11.2
27
Islington
1907
17.4
4.8
28
Brent
1500
15.4
13.1
29
Camden
1993
15.0
14.3
30
Hammersmith and Fulham
1712
14.5
14.3
31
City of London
2297
13.5
n/a
32
Westminster
2492
9.5
3.3
33
Kensington and Chelsea
2708
8.7
n/a
Warren Kenny, GMB Regional Secretary said:
“These official figures show increases in average rents for two bedroom flats of 30% or higher in 14 of the 33 London boroughs in the seven years since 2011. The average increase for all the boroughs is 21.7%. By comparison average earnings in the same period rose by 9.1% in London.
“In Greenwich rents went up by no less than 50% so that a two bedroom flat now absorbs about 70% of the average net pay of a resident in the borough.
“Policy mistakes have made the housing position for lower paid workers worse. Council homes for rents at reasonable levels were aimed at housing the families of workers in the lower pay grades and did it successfully for generations.
“These were sold off – but crucially not replaced as a matter of Tory dogma. Housing benefits was introduced instead to help pay rents for those on lower paid and the costs to the taxpayer has ballooned to over £24 billion a year. It would have been far cheaper to build the council homes.
“The chickens are now coming home to roost on these policy mistakes. There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades. There is now no alternative to higher pay to pay these higher rents plus a step change upwards in building homes for rent at reasonable rents.
“Regeneration companies like Be First in Barking and Dagenham, need to take look at these statistics and see that they need to be offering more affordable housing. Rents in Barking and Dagenham are up 45.5% since 2011, compared to a 16% rise in wages. Earlier this year GMB also found that 30% of Barking and Dagenham residents in employment were earning less than a living wage. These companies have to start offering at least 50% of all new builds as social housing.
“Dogmatic opposition to allowing councils to build homes for rent is a luxury we can’t afford. So too are plans by property developers and councils to demolish over 100 council estates in London and replace them with luxury housing.
“These high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation. As a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents.
“If employers don’t respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market.
“It makes little sense for these workers to spend a full week at work only to pay most of their earnings in rents. They will vote with their feet.”
Housing Management & Maintenance (HMM). 2019. GMB Union.
Available at: https://www.housingmmonline.co.uk/companies/gmb/