GMB Union warns business and blames policy not landlords!

by Property 118

2 months ago

GMB Union warns business and blames policy not landlords!

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GMB Union warns business and blames policy not landlords!

The GMB Union conducted a research study on the average rental costs of 2 bed flats in England compared to wage rises during the period 2007 to 2017.

Overall rents have doubled compared to wages with increases of 18.2% for rental costs over the period compared to wage inflation of just 9.8%. The average cost of a 2 bed flat in England is now £650 pcm.

However, in London the gap is bigger with rental cost increases of 25.9% to an average of £1,500 pcm and wages actually going up slightly less than the national average at 9.1%.

In 16 of 33 London boroughs rent on a 2 bedroom flat jumped more than 30% over the same period and Greenwich had the biggest rise in the capital with a 50% increase in rents to an average of £1,350 pcm while local wages only went up by 7.2%.

GMB regional secretary, Warren Kenny said: “These high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation.

“As a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents.

“If employers don’t respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market. It makes little sense for these workers to spend a full week at work only to pay most of their earnings in rents. They will vote with their feet.

“Policy mistakes have made the housing position for lower paid workers worse. Council homes for rents at reasonable levels were aimed at housing the families of workers in the lower pay grades and did it successfully for generations.

“These were sold off, but crucially not replaced as a matter of Tory dogma. Housing benefit was introduced instead to help pay rents for those on lower paid and the costs to the taxpayer has ballooned to over £24 billion a year. It would have been far cheaper to build the council homes.

“The chickens are now coming home to roost on these policy mistakes. There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades. There is now no alternative to higher pay to pay these higher rents, plus a step change upwards in building homes for rent at reasonable rents.

“Higher pay especially for younger workers is now one essential part of the solution.”

 



Comments

Simon Williams

2 months ago

GMB talk about "much higher rents" but a national average PRS rent rise of just 18.2% over a decade is remarkably low and indeed well below CPI inflation for the same period. Even in London, the rises have barely kept up. To my mind, it shows the PRS was actually quite a well functioning market before George Osborne came along and decided to #### it up.

Also, during the period 2008 -16 (source: ONS) social sector rents rose by an average of 40%. Yes from a lower base - but a far bigger increase than the PRS.

And according to the government's Housing Condition Survey, only about 30% of social renters are in employment compared to 60% in the PRS. The social sector will always be rationed by income and many employed people will not qualify and neither will they be able to wait several years on the waiting list, as by the time a property comes up, they will have moved jobs. A well functioning PRS offers better flexibility for those in work.

And the same Survey says that the proportion of social sector tenants "dissatisfied" or "very dissatisfied" with their accommodation is actual higher than the same proportions in the private rented sector. But we don't hear about rogue local council landlords do we??!

The reality is that social homes for rent are no magic bullet and the only way very large numbers can be built, given high land prices, is to build densely i.e. high rise blocks. That is not what people want.

One thing I always find bleakly amusing is those on the left bleat on saying how much the housing benefit bill is yet to omit to mention its their favorite social landlords getting around 2/3rds of it.


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