The private rented sector is not working for London
According to the Mayor of London, between 2010 and 2018, average private rents in London rose more than twice as fast as average earnings. As a result, around 30 per cent of households renting privately in London spend more than half of their income on rent.
City Makers are being squeezed out
Shelter is among many voices which has long said affordable rent should mean paying around 35% of incomes on housing (excluding bills and after tax and benefits). In London, it has become normal for City Makers to pay 60% of their income on rent. According to PWC, a renter would have to earn £44k to cover the capital’s median private sector rent.
City Makers are being squeezed out – not eligible for scarce social housing, their modest incomes also don’t cover these dizzy rents.
High rents will shape the future of London
The cost of renting is a major reason London has a well-documented shortage of nurses, teachers and other key workers. It is also why London is losing its creatives and artists to other cities, towns and regions in the UK and overseas. The city we know and love is at risk.
The high cost of housing is also a barrier to social mobility, making entry into many professions impossible for anyone without access to a Bank of Mum and Dad. It’s an issue many professional bodies are grappling with and a reason why many have chosen to become a CoHouse partner.
Reimagining rent to build back better
During the pandemic, when many City Maker industries have faced unprecedented strain, the flaws of the private rental sector now threaten the capital’s chance to build back better. The time is now to reimagine what renting a house does for London.
The impact of the pandemic on housing delivery in London could evidently be profound. But the housing market that the city had before the pandemic did not work for the vast majority of Londoners. Covid-19 creates the space and impetus for the housing sector to rebuild a model which works better for our city.
Mayor of London, London’s Housing Delivery Recovery Plan (July, 2020)
