New research on private sector rent levels shows that, at the current rate of rent inflation, average London rents will be £1,625 a month by April 2016. The average figures for all dwellings in Islington will be £1,815.29 per month, in Hackney will be £1,688.89 and in Waltham Forest will be £1,079.76. The forecasts, compiled by Tom Copley AM, are based on an average of rent rises between October 2011 and October 2013 as recorded by the Valuation Office Agency. For outer London average rents will rise to £1,350, and for inner London average rents will rise to £1,805.
The analysis shows that, should the current level of rent inflation continue, high rents will become a significant problem in outer-London, where rents have tended to be lower than inner London (see map below). London rents are forecast to rise at five times the England average.
I’m backing calls for the Mayor to launch an investigation into unsustainable rent increases and establish proposals for a mechanism to stabilise rents in London. The current rate of rent inflation is sucking demand out of the economy, and making London ever more unaffordable for people who work in the capital, which could impact on London’s economic growth.
These figures are a shocking indication of what residents in Hackney, Islington and Waltham Forest and across our city can expect to pay in rent by the end of Boris Johnson’s mayoralty. The current rate of rent inflation is making London unaffordable for people who live here, even those on ‘good’ salaries. With home-ownership an ever distant dream for many, it is time Boris Johnson used his position and launched an investigation into unsustainable rent rises and possible mechanisms for tackling them. Otherwise, we will see a devastating hollowing out of our great city, which will simply end up becoming the playground of the rich.
Britain has one of the least-regulated private rented markets in Europe. When more and more people have no choice but to rent we have to ensure that renting is a stable option, particularly for the growing number of families who live in rented accommodation. There are good landlords who do right by their tenants, but there are an increasing number who do not. So far the Mayor has only adopted trivial voluntary schemes to improve standards, it is time he treated this issue with the seriousness it deserves. There are over 800,000 private rented households in London. If he doesn’t act these people will continue to be squeezed, quality of life will decline and London’s economy will be held back.
It is even more pressing given the Mayor’s recent actions to redefine the criteria for affordable housing, which now sits at up to 80% of the market value. If Boris thinks that £1,452.23 per month, £1,351.11 per month and £863.80 per month (i.e. 80% of the predicted average market value come 2016) – for Islington, Hackney and Waltham Forest, respectively – is ‘affordable’, then he really is out of touch with the reality that millions of Londoners live every day. And, when we look at the Mayor’s decision to call in the Mount Pleasant planning application in Islington, which has a pitiful 12% of the proposed housing units classified as affordable, it’s clear that something needs to be done immediately to investigate what can be done to stop the renting crisis we face across London.
Projected private rent increases in April 2016, (darker shade of red indicates higher increase):
Today, I and my Labour Assembly Member colleagues challenged the Mayor of London on the delivery of affordable housing at the Olympic Park.
The Mayor, as chair of the London Legacy Development Corporation (LLDC) appeared before the London Assembly at City Hall. There are concerns that the affordable housing will be undermined by the introduction of expensive service charges and that the larger, family-sized, properties will be targeted at the private sector.
As lead Labour Assembly Member on Regeneration, I am deeply concerned that the promises made for affordable housing at the Olympic Park will not be delivered. There is a desperate shortage of affordable housing in London, but particularly affordable family homes. To be a long-term success and truly become a new London neighbourhood we need mixed communities and that includes family housing as well. The last thing we want to see is families on modest incomes priced out of the Olympic Park and for it to become an enclave of the rich.
The Olympics and Paralympics were a huge success and showed modern Britain at its very best with the world looking on with envy. We cannot forget the promises made to local residents who had to deal with a long construction phase and disruption. Other Olympic cities have failed to deliver any meaningful legacy with their stadiums and athletes’ villages becoming white elephants. London is poised to deliver for local residents, but the housing has to be affordable and that includes for local families.
The Mayor must deliver on promises that have been made, and this is something that I will be monitoring very closely.
On Tuesday, I tried with my Labour Assembly Member colleagues to block the Mayor’s changes to the London Plan. Unfortunately, we could not secure the two-thirds majority we needed to do so.
The Mayor’s changes will now mean that new ‘affordable’ housing will be set at up to 80 per cent of the market rate in London. This will lead to many new properties in London meant for people on low and modest incomes becoming totally unaffordable.
Yesterday was an historic opportunity for the Assembly to reject a Mayoral strategy but a two-thirds majority could not be secured. This was the first time new powers granted to the Assembly under the Localism Act have been used.
In Hackney Borough, for example, where the household median income is £26,788, tenants would need to have a gross household income of £33,720 to afford a two-bed property at 80 per cent of market rent.
And, in Islington Borough, the median income is £31,560, but to afford a two-bed property at 80 per cent of market rent, a household would need to earn £67,600.
Yesterday’s vote is a hammer blow and signals the death of new truly affordable housing in London. It is a complete travesty that this has happened. Hackney and Islington Borough Councils are against the Mayor’s plan as well as other boroughs of all political persuasions.
The Mayor’s changes will make London’s housing crisis even worse. They will now push affordable housing out of the reach of many Londoners on low, and in some areas, modest incomes. This will also drive up rent, increase land prices and further distort London’s housing market. Boris should have accepted the recommendations of the Independent Planning Inspector, listened to local authorities and revised his London Plan.
Combined with the welfare reforms the Mayor’s changes will make huge swathes of inner London even more unaffordable than they already are. Yesterday’s vote will contribute to the ghettoization of our city and put intolerable strain on a range of already overburdened local services in outer London. This is effectively giving up on ordinary Londoners on modest incomes by making it harder for them to find a home that is affordable.