Significantly more homes urgently need to be developed for the private rented sector to curb rising rental values in London, according to a new study.
Fresh research by the GMB union shows that average rents for two-bedroom flats in the capital have soared to more than half of gross average earnings, with the figure highest in Westminster at 73%, while hitting over 60% in areas including Hackney, Islington and Camden.
Across the South East of England, no fewer than 30 local authorities have seen rents rise to over a third of gross average earnings, further highlighting the country’s growing housing crisis.
Warren Kenny, the GMB's London regional secretary, commented: “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.
“They show that a massive programme to build more homes, especially homes for rent, by the London boroughs is absolutely essential in all parts of the region and has to get under way 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 GMB said decisions by 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.
According to the union, around £24bn was spent on housing benefit last year, with much of this public money it claims 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 taxpayer would be less and people would have housing they can afford to live in,” Kenny added.