London’s affordable housing crisis: The stats that will shock

Figures released by Shelter reveal the depth of London’s housing affordability crisis, writes Kevin Gulliver.

Housing in London: What is to be done?

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Kevin Gulliver is the director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research but writes in a personal capacity; his interests are social and economic policy, especially relating to housing, health, communities and inequalities

Figures released by Shelter reveal the depth of London’s housing affordability crisis. Rents in the private sector have risen steeply over the last 12 months by more than 7 per cent, almost double the rate of increase in the average London wage. In outer London, private rents have increased at three times the rate of wages.

These comparisons are ever more crucial for Londoners since 23 per cent now rent from private landlords in contrast to 15 per cent a decade ago.

Housing-in-the-London
A family now needs an annual household income of almost £60,000 to rent a two-bedroom home at the median Greater London private rent. And in half of London boroughs such a family would need an income of more than £50,000 to afford the median rent in those areas.

Londoners are being systematically priced out of private rented housing, with benefit caps likely to worsen the rental affordability crisis.

The overheating of private renting, fuelled by rapidly rising demand as social housing budgets are slashed, is resulting in a burgeoning ‘sardine apartment’ rental market where landlords seek to squeeze ever more profit out of unused areas of their properties – such as roof spaces and storage rooms – by turning them into flats to rent out to desperate Londoners.

 


See also:

Time to make the housing recovery a political priority 22 Mar 2011

Shapps’s subprime stimulus is a bailout for housebuilders 22 Nov 2011

A third of the country could lose advice vital to preventing homelessness 19 Oct 2011

‘Back of a fag packet’ housing policy continues 3 Oct 2011

Social housing needs a ‘New Deal’ 28 Sep 2011


 

Rising private rents are deepening London’s affordability crisis already felt in the home ownership market. London and the south east generally is the only part of the country to see rising house prices since the credit crunch.

Today, London’s average house price is £354,000 compared to the national average of £162,000; while nationally house prices have fallen by 0.6 per cent during the last 12 months, London’s have increased by 4.2 per cent.

And even though affordability problems have eased elsewhere, they have intensified in London.

The ratio of median house price to median wage increased from 8.6 to 9.7 between 2009 and 2011 and in the most affluent London boroughs the ratios range from 13.3 to 27.1.

The affordability crisis is feeding into ballooning waiting lists and growth in homelessness. More than 366,000 households are on London’s social housing waiting lists; an increase of 3.4 per cent over the last two years. In inner London, there are 199,000, representing a two year rise of almost 11 per cent.

Homelessness in the capital, after annual falls for the last ten years, is now back on an upwards trend with a 10 per cent increase in the last twelve months.

What’s needed to solve the affordability crisis is a concerted social and affordable housing building programme, providing homes with lower rents and homes available on a shared equity basis to enable low and middle income groups to live and work in London.

This has to be achieved with greater levels of public subsidy, even if it means a short-term increase in national debt, which as a proportion of GDP is historically contrary to government claims.

Back in 1979, for every £1 invested in bricks and mortar, £1 was used to subsidise rents and mortgages. Now, the ratio is £1:£5.

Transferring housing subsidies that currently go to private landlords and financial institutions, which lend to housing associations, to bricks and mortar is more economically rational since it creates new housing assets, provides jobs and stimulates economic growth.

 


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72 Responses to “London’s affordable housing crisis: The stats that will shock”

  1. Anonymous

    It’s where the jobs are in many fields. My subject is in fact being shut down in many universities outside London. If I have to move (and I may), then I’ll lose most of my work.

  2. Paddy Gray

    RT @SteveHilditch: The London housing crisis in figures. http://t.co/P5JwY7sK

  3. Kevin Gulliver

    London's housing crisis deepens via @leftfootfwd http://t.co/X64hcadi #ukhousing #nppf

  4. Homes for London

    "Londoners are being systematically priced out of private rented housing" writes @KevinGulliver in @Leftfootfwd http://t.co/8oyDHi2s

  5. Miyanda Nehwati

    “@HomesforLondon:"Londoners are being systematically priced out of private rented housing" http://t.co/BV7Jcd4g”#Newsnight #lbc973 @katehoey

  6. Kevin Gulliver

    "@LSEpoliticsblog: @Shelter on UK's volatile housing market http://t.co/9Kotx8Gt">>London in boom mode counter to UK – http://t.co/X64hcadi

  7. Kevin Gulliver

    @nickygavron Thought you might be interested in this @leftfootfwd post http://t.co/X64hcadi about London's #housingcrisis #ukhousing

  8. Nicky Gavron AM

    @kevingulliver thanks for sharing @leftfootfwd article on london's affordable housing crisis http://t.co/EqjUgc7S #london #housingcrisis

  9. Cameron’s economically irrational Right to Buy relaunch won’t solve housing crisis | Left Foot Forward

    […] See also: • London’s affordable housing crisis: The stats that will shock 30 Mar […]

  10. Lara Oyedele

    London’s affordable housing crisis: The stats that will shock: http://t.co/laOhqXyT by @KevinGulliver #housing #London

  11. DaveHill

    London’s affordable housing crisis: The stats that will shock: http://t.co/laOhqXyT by @KevinGulliver #housing #London

  12. LDNForcedOutYFJ

    London’s affordable housing crisis: The stats that will shock: http://t.co/laOhqXyT by @KevinGulliver #housing #London

  13. David Carter

    London’s affordable housing crisis: The stats that will shock: http://t.co/laOhqXyT by @KevinGulliver #housing #London

  14. OCCUPYLOCALGOVT

    London’s affordable housing crisis: The stats that will shock: http://t.co/laOhqXyT by @KevinGulliver #housing #London

  15. Bernard Collier

    @KarenPBuckMP have you seen this? @leftfootfwd: London’s affordable housing crisis http://t.co/oci94T74 by @KevinGulliver #housing #London

  16. Angela McConville

    RT @leftfootfwd: London’s affordable housing crisis: The stats http://t.co/w1cvfgSr

  17. Angus Carruthers

    MT @HomelessnesEkro London’s affordable housing crisis: The stats that will shock #homelessness http://t.co/2IClU2ok via @leftfootfwd

  18. Lara Oyedele

    "Londoners are being systematically priced out of private rented housing" writes @KevinGulliver in @Leftfootfwd http://t.co/8oyDHi2s

  19. Lara Oyedele

    "Londoners are being systematically priced out of private rented housing" writes @KevinGulliver in @Leftfootfwd http://t.co/8oyDHi2s

  20. Des Brittain

    "Londoners are being systematically priced out of private rented housing" writes @KevinGulliver in @Leftfootfwd http://t.co/8oyDHi2s

  21. Tabladaolgagala

    London must be very diligent especially now because we know that the Olympic will be held there so this is an opportunity for them. Go rent out some properties that you have and tourists need. Earn now! Want to know more? try this: http://www.stratfordvisit.com/articles/homes-4-rent

  22. Kenn Kavagna

    Newsbot9 is right. Greater job demand means that there are more opportunities in London than in other cities across the UK. If we were to relocate poorer families they would be further ostracised with less opportunities to find work. More infrastructure and affordable housing is needed to provide better support and affordable homes in London.

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