According to the housing charity Shelter, families need to earn in excess of £52k per annum to afford to rent a two bed home in London.
The cost of renting in London was analysed during Shelter’s “Homes for London” campaign, and found that in order to afford a two bed property, a family would need to take home an average of almost £3,500 per month (£52k per annum). In eight of the most expensive London boroughs, including Hackney and Tower Hamlets, this increased to in excess of £60,ooo pre tax earnings to afford to rent a two bed property.
In the last two years, the number of families renting from private landlords has soared by 70% to nearly one in every four households. Affordability is beginning to become a real issues as rents in London rose by nearly 7% in 2011, a figure nearly double the rate of salary inflation for average London wages.
The average household income in London is less than £35,000, meaning that families are paying an increasing proportion of their salary out as rent each month, and more and more are struggling to afford the increasing cost London rents.
Previous research by Shelter has indicated that households who spend more than 35% of their income on rent will be more likely to struggle financially.
In an Ipsos Mori poll released last week, Londoners indicated that the most important policy the mayoral candidates have discussed is finding a way to reduce the cost of private renting.
The Homes for London campaign is demanding that the next mayor use their influence to prioritise housing, and to help London’s tenants by getting them a better deal which protects families from the increasingly expensive rental market.
Shelter chief executive Campbell Robb said: “With so many Londoners locked out of homeownership, more and more families have no other option but to rent – but rents are now so out of touch with wages that some families are spending over half of their income just to keep a roof over their head, leaving little left for food, fuel and other essentials.”