Rents are going to continue rising until the government regulates them

Ask anyone on a low to middle income renting in London if rents are too high, and you’re only going to get one answer.

Houses colourful

Darren Johnson is Green Party member of the London Assembly

Ask anyone on a low to middle income renting in London if rents are too high, and you’re only going to get one answer.

When public anger about rents is put to them, the mayor of London and the government complacently repeat the same old line that they will build enough homes to solve the problem.

It’s time, however, that they recognised the truth: rents are already too high and they are going to continue rising until the government regulates them.

In 2012, the official figures show that the median rent in London rose by 9 per cent, while pay rose just 2 per cent. This after the mayor had been in office trying to build more homes for four years. He recently admitted it could take ten years, though my research suggests it could take as long as thirty years to bring house prices and rents back to affordable levels.

The Resolution Foundation’s excellent report on unaffordable rents across the UK adds to the work of Shelter, London Citizens, myself and others who have tried to improve the public’s understanding of this problem.

I launched a web site in June last year asking the simple question: can your job pay the rent in London?

Shockingly, even rents for a room in a flatshare in the cheaper (lower quartile) part of the market aren’t affordable to somebody earning the National Minimum Wage in any of the London boroughs. The average household, with a much higher income, faces the same problem renting a three bed home.

When you have to renew your tenancy every year, what hope can you gain from the mayor’s reassurances about prices in ten years’ time?

I got lots of feedback on this map. As one person pointed out, “you need to factor the cost of living into the equation as well e.g. food, travel, childcare and utilities”. With childcare costs 25 per cent more than the national average and fares being raised every year above inflation, these rents become ever more impossible.

The mayor is wrong to think we can just build our way out of this, and wrong to oppose any form of rent control.

What we most need in London is radical reform to private rented housing, including stabilising rent controls and more secure tenancies.

If the mayor were to advocate this, alongside a £1bn a year social housing budget and a living wage for all, then the majority of Londoners who rent would really have a mayor on their side.

4 Responses to “Rents are going to continue rising until the government regulates them”

  1. OldLb

    you need to factor the cost of living into the equation as well e.g. food, travel, childcare and utilities

    ==========

    And the biggest cost of all – you. Taxes screw people even more than the things above.

    Yet another example too of an argument about rent that won’t talk about the elephant in the room. Migration. If you pull in 5 million migrants they are going to be living somewhere. That creates a shortage and drives up prices.

    And yet, when you talk about the other elephant, taxation, you won’t even discuss that tax should be capped to control expenditure. OK for social housing landlords and private landlords to be hit, but you won’t cap your income.

  2. OldLb

    Remember you can’t supply, and the market can’t supply unless the private sector makes a profit.

  3. Alan Borgars

    We should not have to depend on the market for things provided for public need such as housing, transport and energy-these should be democratically and socially owned by people as if they were building societies,run for people’s benefit and not for profit.

  4. OldLb

    So lets see about the profit motive.

    ONS puts the pension debts at 6,500 bn. All not for profit. So total state debts are 8,000 bn, rising at 900 bn a year.

    Taxes are only 600 bn.

    The reason is that the pension system has been treated as a profit source for government to spend contributions.

    That’s the result of welfare state which is based on a PAYG pension scheme.

    So perhaps you should say where the money is going to come from?

    You can’t print, because its inflation linked debt.

Leave a Reply