How hard is it living in London on a low income? We've been checking this for a while — examining how rents are changing in comparison with wages and other bills.
What we do is create a fictional family with two children (who are old enough to not need childcare and able to share a room) and work out fixed income and outgoings for either one or two adults working. We don't take things like clothes or savings into account, because they can vary — though of course we all know they're necessities and need to be paid for.
Our original aim was to see if it was possible to live in London on minimum or living wage without having to resort to housing benefit. If you're on your own, even working 40 hours a week, the answer is 'not a chance'. And even two adults working full time on minimum wage... on paper, maybe; but in reality, no.
When looking at flats in each area, we try to discount obvious outliers at the bottom of the market, but even so we have a feeling we're underplaying the costs. (In Neasden, Catford and Tottenham, for example, we suspect the real bottom of the rental market is about £50pcm higher than what we've listed; and expect to pay significantly more if you don't have your own furniture in some areas.) We also have no way of knowing what state these flats are in, whether they accept people on benefits — many landlords don't, even though increasing numbers of Londoners need housing benefit to survive here — or how lucky our fictional family would need to be to bag one of these 'cheap' places. If you've ever gone through the pain of renting, you'll know it's dog eat dog out there.
We're also finding that rents in outer London are starting to catch up with inner London. That's not surprising, as benefit caps and the general lack of affordability pushes people outwards. But if we get to a point where all of London is out of the reach of people who are working — and a couple of years ago, 700,000 Londoners earned less than the living wage (PDF) — will politicians then, finally, start doing something serious about the housing crisis?
Minimum wage: £6.50 an hour x 40 hours = £260 a week / £1,118 a month. After tax and with child benefit: £1,165.43
With two people earning plus child benefit: £2,182.94
London Living Wage: £9.15 an hour x 40 hours = £366 a week / £1,573.80 a month. After tax and with child benefit: £1,475.37
With two people earning plus child benefit: £2,802.82
Gas and electricity: £53.91 a month
Water: £34.05 a month
TV licence: £12.12 a month
Phone and broadband: £15.95 a month
Contents insurance: £4.17 a month
Council tax: dependent on area, roughly £100 a month (£75 a month for single parent household)
Monthly travelcard zone 1-3: £144.80 / Monthly travelcard 1-6: £225.10
Food: £350 a month (£270 for single parent household)
Money left on minimum wage
Two adults living in zone 1-3 have £1,323.14 left
One adult working, living in zone 1-3 has £555.43 left
Two adults living in zone 1-6 have £1,162.54 left
One adult working, living in zone 1-6 has £475.13 left
Money left on living wage
Two adults living in zone 1-3 have £1,943.02 left
One adult working, living in zone 1-3 has £865.37 left
Two adults living in zone 1-6 have £1,782.42 left
One adult working, living in zone 1-6 has £785.07 left
Where can they afford to live?
Oh dear. We know it looks like Bexley's under a grand, but in reality if you need a furnished flat, we can't find anywhere in London where you can realistically hope to find a two bedroom flat for less than £1,000 a month. Rents are — and this isn't unusual, we've found — between £50 and £100 a month higher than they were six months ago. We suspect we should start looking in different areas if we're going to continue this exercise, rather than throwing up our hands in disgust: suggestions in the comments, please (if you want to publicise an area's 'cheapness'. We'll understand if you'd rather keep it to yourself).
Neasden from £1,250pcm
Tottenham from £1,150pcm
Catford from £1,150pcm
Forest Gate from £1,100pcm
Streatham from £1,200pcm
Chadwell Heath from £1,050pcm
Bexley from £800pcm (all unfurnished)
Uxbridge from £1,050pcm
Caterham from £1,100pcm
Feltham from £1,050pcm
Enfield from £1,100pcm
Milton Keynes from £725pcm
Monthly travel with travelcard £558
Sevenoaks from £1,000pcm
Monthly travel with travelcard £378.70
Chelmsford from £750pcm
Monthly travel with travelcard £451.60
Guildford from £1,000pcm
Monthly travel with travelcard £403.60