London's essential workers locked out of housing market for rentals
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In the heart of one of the world's most vibrant cities, London, a housing crisis looms large. Ben Twomey, chief executive of Generation Rent, has highlighted the pressing issue that those working in vital jobs cannot afford to live in the city, potentially causing devastation to local communities.
According to Twomey, everyone loses out if those working in key jobs such as education, healthcare, social care, construction, retail, commerce, and hospitality are priced out of the capital. The current rent crisis is of paramount importance, especially for low-income earners like teaching assistants and kitchen assistants, whose incomes are barely enough to cover the market-rate rent for a one-bedroom home.
The average proportion of incomes required to cover the market-rate rent for the median one-bedroom home is more than 100% of teaching assistants' incomes, and exactly 100 percent of kitchen assistants' incomes. The median private rent in Inner London is worth 106% of a teaching assistant's salary, making it clear that affordable housing is a necessity.
To address this affordability issue, several measures are being proposed. The focus is on boosting social housing supply, implementing affordability-based rent control mechanisms, and supporting rental sector reforms.
Experts and organizations emphasize the urgent need for governments to build more social housing, especially targeted at key workers and low-income renters. This expansion of the social housing stock is seen as essential to reducing reliance on high-cost private rentals, which currently consume over 40% of income for many London renters.
Some proposals suggest rent-setting mechanisms based on affordability criteria such as the "living rent" model. This approach would cap rents to a proportion of local incomes or to a percentile of local market rents, ensuring rents remain within a sustainable threshold for tenants, including key workers.
The Build-to-Rent Alliance advocates for wider reform beyond planning permission simplification to address broader systemic issues in rental housing supply. Their multi-pronged policy demands include government incentives and regulatory changes that could increase quality rental housing availability at affordable rates, potentially benefitting key workers who struggle in the private rental market.
Without proactive government intervention—both in funding new affordable/social housing and in regulating rent levels—housing affordability for crucial public and service sector workers will continue to worsen. Generation Rent is calling on England's metro mayors to have the power to control rents in their local areas and advocating for the mayor and the government to build more affordable homes in London and increase the availability of social housing.
Generation Rent believes that England's metro mayors should have the power to "slam the brakes on local rents" to provide breathing space for key workers. They are calling on candidates for the London mayoralty to demand powers to control rents and commit to building many more social homes in the capital.
Currently, not a single one of Greater London's 32 boroughs is affordable for people working in jobs such as bus drivers, care workers, cleaners, community nurses, hairdressers, painters and decorators, sales assistants, and teaching assistants. The least affordable London borough for teaching assistants is Westminster, with almost one and a half (145%) times their income required to cover average rents.
As London faces a housing crisis, with one in 50 Londoners homeless and a council planning to kick 20,000 households off the social housing waiting list, it is crucial that action is taken to address the housing crisis. Ben Twomey believes that it is vital for the mayor and the government to take action to ensure that local people can stay healthy, receive an education, find a safe home to live in, and purchase basic goods.
[Image: By Giammarco Boscaro]
References: [1] https://www.theguardian.com/housing-network/2022/mar/04/rent-control-uk-wales-england-housing-policy [2] https://www.theguardian.com/housing-network/2022/feb/23/how-can-we-build-more-social-housing [3] https://www.theguardian.com/housing-network/2022/feb/03/the-build-to-rent-alliance-has-a-plan-for-affordable-housing [4] https://www.theguardian.com/housing-network/2022/jan/27/why-are-young-people-struggling-to-afford-housing [5] https://www.theguardian.com/housing-network/2022/jan/20/build-to-rent-alliance-launches-to-campaign-for-affordable-housing
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