10:28 AM, 5th June 2018, About 4 years ago 2
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.”
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