Earn £100,000 to afford rent in central London

According to the ‘Evening Standard’;

“Unaffordable: rents in some parts of the capital are up 230 per cent

Workers in central London have to earn almost £100,000 to be able to rent homes defined as “affordable” by the Government and still enjoy a decent lifestyle, new research has shown.

Since 2012 the Coalition has said that any rent which is “up to 80 per cent” of market levels is deemed to qualify as “affordable”.

But in many parts of London market rents have rocketed to such levels that even 80 per cent would be very hard to manage for anyone on a five-figure salary. The research assumes a ceiling of 35 per cent of income going to the landlord, leaving enough to cover other living costs.

On that basis the income needed to pay 80 per cent of market rent on an average two-bedroom flat is nearly £100,000, in Kensington & Chelsea and Westminster according to data commissioned by the magazine Housing Today. Stuart Macdonald, editor of Inside Housing magazine, said: “Our research assumed 35 per cent of net income was spent on housing costs and reveals just how unaffordable the government’s ‘affordable rent’ is.”

In a further eight local authority areas tenants need to earn between £60,000 and £80,000 a year to pay an “affordable” rent. They are the City of London, Camden, Islington, Hammersmith & Fulham, Tower Hamlets, Wandsworth, Southwark and Brent. In London’s cheapest borough for house prices and rent, Barking and Dagenham, tenants still need to be earning nearly £40,000 a year.

Brendan Sarsfield, chief executive of Family Mosaic and leader of the G15 group of London’s largest housing associations, said: “These figures show that the affordable rent regime is not working.” London boroughs have seen rent rises of between 30 and 230 per cent between 2001 and 2011, research for estate agent Strutt & Parker has found.

The boroughs with the steepest increases were Barking and Dagenham, with a rise of 230 per cent, and Tower Hamlets, up more than 150 per cent. In Newham average rent rose by 115 per cent over the decade.

The Strutt & Parker research also found that between 2001 and 2011 the number of people renting privately in London rose by 79 per cent.”

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