Mayoral Elections: Ain't Nothing Going On But The Rent

BethPH
By BethPH Last edited 70 months ago
Mayoral Elections: Ain't Nothing Going On But The Rent

Last month's report from Shelter on London's unaffordable rents makes pretty depressing reading for anyone trying to find a roof over their head in the capital.

The bottom line is that a family needs to earn a combined salary of £52,000 a year to be able to rent a two-bedroom home in London while still being able to eat and pay the bills. You can read the report here. When you consider Shelter's claim that the median wage in London is £24,500 (with many people being on less than this) the gap looks pretty worrying, especially when you combine it with a 36% increase in homelessness in London. The benefits cap has also had the effect of driving the lower-paid out of central London. Shelter's Homes for London campaign aims to put housing as a key issue in the upcoming elections.

How expensive are rental properties in central London though? We took a look at a few boroughs to get an idea of how much it would cost to rent a two-bedroom flat:

Islington - cheapest £1060 pcm
Westminster - cheapest £1365 pcm
Tower Hamlets - cheapest £1150 pcm
Camden - cheapest £1100 pcm
Southwark - cheapest £850 pcm
Hackney - cheapest £1000 pcm
Lambeth - cheapest £825 pcm
City of London - cheapest £1840 pcm

Obviously, we've ignored deciding factors like proximity to tube stations, whether it's above a heavy metal pub or next to an all-night takeaway, but when you consider that even the cheapest of those flats would require a deposit of the equivalent of six weeks' rent, plus another month's rent in advance, plus the myriad and occasionally spurious charges levied by letting agents, it starts to look fairly tight and that's before you've moved in. Add council tax, utility bills, food and transport onto a monthly rent of £825 and assuming you're earning Shelter's estimate of £24,500 per year, that would pretty much equal your monthly take-home pay.

So what are the mayoral candidates proposing to do to address the increasing pressure on low-earners renting in London? Ken Livingstone wants to establish a non-profit letting agency and campaign for a London living rent. Jenny Jones wants to establish an ethical letting agency and lobby for reforms to bring down rents for private tenants. Brian Paddick wants to introduce a London-wide mayor’s kitemark for the private rental sector and Boris Johnson wants to launch a rental standards accreditation and has created a London rent map to show average private sector rents across the capital. He is, however, vehemently opposed to rent control on the basis that it stifles investment and reduces availability.

With a Trust for London report last year showing that poverty and housing are worse in London than anywhere else in England, we'd like to see more from all of the candidates on how their reforms would make living in the capital more affordable. Earlier this week, our posts from Crisis and Trust For London highlight the unaffordability of living in London.

See all of Londonist's election coverage here.

Photo by roboxley in the Londonist Flickr pool

Last Updated 26 April 2012

jamesup

What  "stifles investment and reduces availability" is the planning system and viewing corridors that BJ introduced - there would be thousands more homes in Elephant being built if we worried more about people and less about the view from Serpentine bridge. 

Guest

Rent in London is very expensive, even if you live outside the central zones (zones 3-4, for example). We pay more than the average prices listed above and live in zone 3. Our earnings are also below the median figure quoted above. This means we usually have no, or very little, earnings left over after paying expenses. Many of my friends living and working in London are in the same boat - I don't know many people, even if they are experienced and qualified, earning the median salary or above it. Perhaps we're an exception to this general figure but I'm sure many out there could say the same.

Petermacintosh

 An lets not ignore the fact that housing benefit artificially inflates the market rate for private rents, thus pushing the low end of the rental market out of the reach of people on low earnings. They only serve to make renting less affordable for the working majority (who have to move if the economics don't fit), and ensures ever increasing profits for landlords at the expense of the taxpayer.

Abolish the current benefit system, introduce a land-tax and a living wage for all. Cut the bureaucracy and government subsidies for private landlords.

Kayode

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BethPH

How do rent controls work? Is there anyone on here who's experienced a rent control system?

Punka66

I have lived in Islington (De Beauvoir Town to be precise) for 4 1/2 years on reasonable rent for the area as I was lucky enough to have a good landlady who barely raised the rent during my tenancy. Unfortunately, landlady has just sold the flat and so I am now looking for another place to rent and am astounded by the astronomical price of rent not only in my area but in all areas within zones 1-3. Not only are the rents extortionate but I'm also finding that hardly any of the flatshares on the market have a lounge (even those priced at £800 a month in Islington!) as landlords are subletting these. Living in London has always been expensive but never has finding an affordable flatshare been so tough.

Stickysticky

we used to have rent control and secure tenancies (assured). until 1988 when thatcher abolished them, ahem, to stop unscrupulous landlords (sic). bring them back (and let the buy-to-renters 'suffer' rather than the rest of us. :-)

Pete

Funny how with interest rates falling from ~5% down to 0.5% we never saw a reciprocal fall in rents charged by landlords who's lending costs will have fallen by £100s... parasites sucking the life out of the city. Every pound spent on rent is a pound that could have been spent on the local economy generating jobs and boosting the economy. Instead individuals, MP's (yes many have BTL empires) and corporate bodies feather their nest with our hard earned money. The sick thing is how much housing benefit is being funnelled straight into their pockets. It's a heist and a scam and no politician will touch it.
 
It IS time something was done about this.

nancoise

I have experience of living in a rent-controlled apartment in the Boston area.  At first, rent control stops the escalation, but then landlords cease doing any but the most minimum repairs on their properties and the housing stock deteriorates.  In NYC there was widespread rent fraud -- remember the show 'Friends'?  The only reason Monica and Rachel could live in a flat the size of an airplane hanger was because they had illegally taken it over from someone's grandmother who had gone into a home/died and was never mentioned again.  

Nobody's bleeding for the BTL landlords, but in central London they're getting about 3.5% return on their investment and one dodgy tenant who stops paying rent can demolish a whole year's earnings.  Lots of people got into BTL when Gordon Brown decimated the pensions system because they couldn't trust that they'd have anything to live on in retirement and property seemed a surer bet.  First Thatcher sold the council houses -- but were those tenants ever going to vacate and buy their own place to free them up for others?  Not likely.  Then Labour reneged on its promise to build jillions of council housing units, opened the gates of immigration (this isn't about race, it's about the number of people pouring into London without the infrastructure to support them) and you have a perfect storm.  Oh, I forgot about the billions also being poured into London property by overseas investors who then are happy to let properties sit empty as long as their money is in pounds sterling rather than dodgy euros and the storm gets even worse.

More council properties need to be built or bought.  People should not have a home for life; once they earn above a certain salary, they should vacate properties for those who really need them.  Empty properties should attract a premium tax which should go right back into the building programme.  BTL lending criteria should be tightened up (right now you have to jump through many hoops to get an owner-occupier mortgage, far fewer for a BTL one).  That would be a start.

Kenn Kavagna

The increase in rental prices have created a generation of renters that are unable to save up the deposit required to buy a home. For those living in London the cost of living means that more people are choosing to live with friends (or even strangers) in over crowded properties. Better legislation is needed to create more affordable homes and to help housing associations build more affordable housing across London and the UK.