The London housing market is obviously out of control. While it emerged today that "political uncertainty" and various other factors have caused prices to fall in the capital, south-east England and other areas of the UK, the cost of renting remains crippling for many Londoners because their salaries have simply never caught up.
The cap on public sector pay and below inflation pay rises in both the public and private sectors have left many people with little money left over after after the rent is paid, and a new study by the GMB London lays bare the extent of the crisis.
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Since 2011, the cost of renting a two-bedroom property in London has shot up by an average of 26% – and by as much as 50% in Greenwich, which had the highest increase, where the cost has soared from £900 per month to £1,350 in 2017.
Rents in other London boroughs rose by a similarly worrying amount. In Newham, prices increased by 47.4% between 2011 and 2017, followed by Barking and Dagenham (42.4%), Lewisham (42.1%), Sutton (40.6%) and Waltham Forest (40.1%).
When residents' earnings are taken into account, it's clear how difficult it must be for the poorest to get by in the capital. The average rent for a two-bedroom property now eats up more than 50% of gross average earnings in 17 of London's 33 boroughs, compared with 44.9% in 2011. In the rest of England in 2017, by contrast, the average figure is 27.4%.
These boroughs include Westminster, Hackney, Islington, Camden, Brent, Newham, Tower Hamlets, Hammersmith and Fulham, Haringey, Lambeth, Southwark, Ealing, Hounslow, Merton, Barking and Dagenham, Barnet and Greenwich.
The situation is the worst in Westminster, where the average rent for a two-bedroom home is 71% of residents' gross average earnings. It's a similarly dire scenario in other wealthy boroughs, including Hackney, where the same kind of property is 67.3% of gross average earnings, Islington (63.9%) and Camden (62.1%), along with Brent (60.4%) and Newham (60.1%).
Warren Kenny, GMB London's regional secretary, said the figures highlight the extent of the squeeze felt by workers and their families in the capital since the 2008 financial crisis. Rents have rocketed while pay has been stagnant or falling.
"Pay has to rise to allow workers to afford these ever rising rents so the public sector pay cap and the below inflation pay rises in both the public and private sectors has to end to avoid a drop in consumer spending, which, if not checked will lead to a further recession," Kenny said.
More homes, especially homes for rent, also need to be built in London and fast, he added. "We have been talking about this problem for far too long, there can be no excuses for not providing housing to people that they can afford to live in on average wages." What will it take for the government to take notice?