Wed, 29 Jul 15
The capital could be on the verge of a labour crisis as low-paid workers are unable to afford sky-high London room rents, according to new data.
Figures from flat and house share site SpareRoom.co.uk highlight the budget-stretching problems that are facing those who are already priced out of the property ladder, with renters on the London Living Wage still unable to afford a single London postcode.
"Affordable" rent is defined as not taking up more than 35 per cent of a tenant’s take-home pay.
Flatsharing is the most affordable way to rent, yet the research reveals those earning the London Living Wage of £9.15 per hour would have to budget more than half their take-home pay for rent, says Spareroom.
Indeed, the average weekly income on the London Living Wage is £292.69 after tax, while the average weekly room rent has risen by 6 per cent in the past 12 months to £164.31 - resulting in renters forking out more than half (56 per cent) of their net income.
SpareRoom looked at every postcode district in the capital and found that not one is classed as affordable to those on the London Living Wage, let alone apprentices, who earn just £2.73 per hour, or £102.38 per week.
Even the cheapest postcodes to rent in London, Thamesmead (SE28), where the average room rent is £480 per month, and Edmonton (N9), where rent is £505 per month, are classed as out of reach. On £9.15 per hour, renters would still have to budget 38 per cent and 40 per cent respectively of their net income for accommodation.
Matt Hutchinson, director of SpareRoom.co.uk, comments: "We’ve reached a point where the housing crisis is driving the lowest paid workers out of the capital. Even the cheapest way to rent, flat sharing, is officially unaffordable to them across the whole of London."
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