Rent in East of England up 31.4% since 2011 compared to 8.8% pay rises

GMB19Housing

£775 per month average rent for two bed flat in East of England: up 31.4% since 2011 compared to 8.8% pay rises GMB congress told

There is a massive shortage of homes for rent at reasonable rents for workers in the lower pay grades, says GMB London

A new study by GMB of official data shows that between 2011 and 2018 rent prices for 2 bedroom flats in East of England increased by 31.4% to an average of £775 per month, whilst over the same period, monthly earnings increased by just 8.8%.

In East of England, Cambridge is the council that has seen the biggest rise in rent prises. Between 2011 and 2018 prices of a 2 bedroom flat rose by 38.8%, to an average price of £1,180 per month. Meanwhile, wages in Cambridge rose by just 9.4%.

Other East of England councils with a significant gap between pay-rises and rent are; Watford, where rent has risen by 38.2%, yet wages have risen by just 10.6%; Luton, where rent has risen by 37.5% since 2011, and wages have risen by 16.7%; Hertsmere, where rent has risen by 37.1%, yet wages by just 10%; and North Hertfordshire, where rent for a two-bedroom flat has risen by 34.6% to an average of £875 per month, whilst wages have risen by just 10.1%.

The figures for the 47 East of England councils are set out in the table below. This is from a new study by GMB London Region of official data from the Office of National Statistics (ONS) for 47 councils in East of England. It shows the median rent of a 2-bedroom flat in 2018, the percentage change in rent-prices between 2011 and 2018, and the percentage change in monthly earnings between the 2011 and 2018. [See notes to editors for sources and definitions]

Warren Kenny, GMB Regional Secretary said:

“These official figures show increases in average rents for two bedroom flats of 30% or higher in 11 of the 47 East of England Councils in the seven years since 2011. The average increase for all the councils is 31.4%. By comparison average earnings in the same period rose by 8.8% in the East of England.

“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 benefits 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.

“Dogmatic opposition to allowing councils to build homes for rent is a luxury we can't afford. So too are plans by property developers and councils to demolish over 100 council estates in London and replace them with luxury housing.  

“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.

ENDS

Contact: Vaughan West 07967 342197 or GMB London Press Office 0758 3039451

Notes to Editors

Sources:

1/ Private Rental Market Summary Statistics; Valuation Office Agency © Crown copyright 2018.

The data is collected by the Valuation Office captured during the course of Rent Officers’ statutory responsibilities to administer functions related to Housing Benefit (LHA and LRR schemes) and Universal Credit on behalf of the Department for Work and Pensions.

Landlords and letting agents provide VOA Rent Officers with data about the properties they let. This information is captured electronically in the VOA’s lettings information database. Checks are carried out at the point of entry to ensure that any Housing Benefit funded tenancies are excluded from this database.

Two Bedroom self-contained properties with two bedrooms including houses, bungalows, flats and maisonettes.

Housing Benefit claimants are not included in the samples used in for these data.

2018 data is for the 12 months to the end of March 2018

2/ Earnings data is from the Annual Survey of Hours and Earnings 2011 and 2018, Office for National Statistics. Monthly data is calculated from gross median annual pay for all full time employees by place of residence.

Median when a series of numbers are arranged by order of magnitude the median represents the middle value. Where there is an even number of values the median is the mean of the two values closest to value in the centre of that distribution