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Pay has to rise to allow workers to afford these ever rising rents so the public sector pay cap and the below inflation pay rises in both the public and private sectors has to end to avoid a drop in consumer spending, which, if not checked will lead to a further recession says GMB London region.
The average rents for two bedroom apartments in Greenwich has risen from £900 per month in 2011 to £1,350 in 2017, an increase of 50 per cent. This is the highest increase in 33 London boroughs.
Next in the league for the increase in the average rents for two bedroom property between 2011 and 2017 is Newham at 47.4 per cent, followed by Barking and Dagenham at 42.4 per cent, Lewisham at 42.1 per cent, Sutton at 40.6 per cent and Waltham Forest at 40.1 per cent.
As a result of these increases the average rents for two bedroom apartments has now risen to more than 50 per cent of gross average earnings of residents in 17 London Boroughs.
These are Westminster, Hackney, Islington, Camden, Brent, Newham, Tower Hamlets, Hammersmith and Fulham, Haringey, Lambeth, Southwark, Ealing, Hounslow, Merton, Barking and Dagenham, Barnet and Greenwich.
In Westminster the average rent for a two bedroom property is 71 per cent of the gross average earnings of residents of the borough. This is the highest in London.
Next highest are 67.3 per cent in Hackney, 63.9 per cent in Islington, 62.1 per cent in Camden, 60.4 per cent in Brent and 60.1 per cent in Newham.
In London as a whole, workers are paying out 53.3 per cent of their earnings on rent, up from 44.9 per cent in 2011. This is significantly higher than the England average figure of 27.4 per cent.
Set out in the table below are the 2017 figures for 31 London boroughs where data are available with comparable figures for 2011 for a two bedroom property.
The tables have been compiled by GMB London region.
|2011 Two bedroom median rent||2011 median monthly earnings||%||2017 Two bedroom median rent||2016 median monthly earnings||%||% change in monthly rent since 2011|
|3||Barking and Dagenham||825||2,160||38.2||1,175||2,324||50.6||42.4|
|20||Kingston upon Thames||1,068||2,908||36.7||1,350||3,165||42.7||26.5|
|24||Hammersmith and Fulham||1,495||2,924||51.1||1,842||3,170||58.1||23.2|
|27||Kensington and Chelsea||2,492||——||——||3,033||——||——||21.7|
|30||City of London||2,024||——||——||2,383||——||——||17.8|
|31||Richmond upon Thames||1,275||3,428||37.2||1,500||3,506||42.8||17.6|
Warren Kenny, GMB London regional secretary, said:
“These figures demonstrate the extent of the squeeze felt by workers and their families in London since the financial crisis in 2008. Rents have surged upwards as pay has been stagnant or falling.
Pay has to rise to allow workers to afford these ever rising rents so the public sector pay cap and the below inflation pay rises in both the public and private sectors has to end to avoid a drop in consumer spending, which, if not checked will lead to a further recession.
In addition, they show that a massive programme to build more homes, especially homes for rent, by the London boroughs is absolutely es
sential in all parts of the region and has to get underway without delay.
We have been talking about this problem for far too long, there can be no excuses for not providing housing to people that they can afford to live in on average wages.
The decisions of the Thatcher government in the 1980’s to sell council housing stock, and not replace it, and to pay landlords housing benefit instead of providing social housing directly has been a huge and expensive mistake.
Last year, for example, £24 billion was spent on housing benefit, with much of this public money ending up untaxed in bank accounts in offshore tax havens. If a fraction of that amount had been spent on social housing for rent, the strain on the tax payer would be less and people would have housing they can afford to live in.