House rent prices in London have soared by more than a quarter since 2011 with the average flat in the capital now £1,500 a month.
That’s despite wages rising by just 9.1% over the past six years, a report by trade union GMB found.
In some boroughs, prices have jumped an incredible 50%, pushing small, cramped flats to well above £2,000 a month.
The GMB – which represents more than 631,000 workers in Britain – has now called for employers to revise wages to support those battling poor pay with the rising cost of living.
It said bosses who refuse to take action will face staff shortages in the long term, as workers are priced out of the city.
It’s report found that between 2011 and 2017, rent prices for 2 bedroom flats in London increased by 25.9% whilst over the same period, monthly earnings increased by less than half (9.1%).
Across England as a whole, between 2011 and 2017, rent increased by 18.2%, with the average 2-bedroom flat costing £650 per month. Meanwhile wages increased by 9.8%.
In London, Greenwich is the borough that has seen the greatest rent rise. Between 2011 and 2017, the cost of a 2 bedroom flat has gone up 50% to £1,350 per month, despite wages growing just 7.2%.
In Lewisham, the cost of a flat has increased by 42.1% since 2011, while salaries have jumped just 16.8%.
Meanwhile, in Sutton, rent for a two-bedroom flat has almost doubled (40.6%) to an average of £1,195 per month, despite wages rising just 10.3%.
Warren Kenny, GMB Regional Secretary said: 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.
These high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation.
If employers don’t respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market.
The GMB said initiatives such as Right to Buy are to blame which saw the Government sell off council homes for significant discounts in exchange for Housing Benefits instead.
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, Kenny said.
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.
There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades.
How much does it now cost to rent in your local borough?
GMB conducted a report across 31 London boroughs to reveal where rent has risen the most based on a two bedroom flat.
Here’s how much it now costs to live in each area, versus how much wages have, on average, risen over the same period (2011-2017).
- Barking and Dagenham, average rent £1,175 versus 16.4% rise in earnings
- Barnet, average rent £1,400 versus 15.2% rise in earnings
- Bexley, average rent £1,025 versus 4.1% rise in earnings
- Brent, average rent £1,500 versus 13.1% rise in earnings
- Bromley, average rent £1,225 versus 18.7% rise in earnings
- Croydon, average rent £1,175 versus 11.7% rise in earnings
- Camden, average rent £2,058 versus 14.3% rise in earnings
- Ealing, average rent £1,458 versus 8.6% rise in earnings
- Enfield, average rent £1,300 versus 6.5% rise in earnings
- Greenwich, average rent £1,350 versus 7.2% rise in earnings
- Hackney, average rent £1,798 versus 7.7% rise in earnings
- Hammersmith and Fulham, average rent £1,842 versus 14.3% rise in earnings
- Haringey, average rent £1,499 versus 9% rise in earnings
- Harrow, average rent £1,325 versus 10.4% rise in earnings
- Havering, average rent £1,050 versus 9.2% rise in earnings
- Hillingdon, average rent £1,250 versus 3.2% rise in earnings
- Hounslow, average rent £1,350 versus 8.6% rise in earnings
- Islington, average rent £1,950 versus 4.8% rise in earnings
- Kingston upon Thames, average rent £1,350 versus 8.5% rise in earnings
- Lambeth, average rent £1,603 versus 0.8% rise in earnings
- Lewisham, average rent £1,350 versus 16.8% rise in earnings
- Merton, average rent £1,450 versus 7.8% rise in earnings
- Newham, average rent £1,400 versus 9.5% rise in earnings
- Redbridge, average rent £1,250 versus 3.3% rise in earnings
- Richmond upon Thames, average rent £1,500 versus -0.8% rise in earnings
- Southwark, average rent £1,600 versus 5.0% rise in earnings
- Sutton, average rent £1,195 versus 10.3% rise in earnings
- Tower Hamlets, average rent £1,800 versus 11.2% rise in earnings
- Waltham Forest, average rent £1,275 versus 16.1% rise in earnings
- Wandsworth, average rent £1,700 versus 9.6% rise in earnings
- Westminster, average rent £2,492 versus 3.3% rise in earnings