Rent in East of England up 27.1% since 2011 compared to 8.8% pay rises

Rent

£750 per month average rent for two bed flat in East of England: up 27.1% since 2011 compared to 8.8% pay rises GMB congress told

High rents are here to stay so as a direct consequence employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents GMB Congress told

A new study by GMB of official data shows that between 2011 and 2017 rent prices for 2 bedroom flats in East of England increased by 27.1% to an average of £750 per month, whilst over the same period, monthly earnings increased by just 8.8%.

In England as a whole, between 2011 and 2017, rent has increased by 18.2 percent, with the average 2-bedroom flat costing £650 per month. Meanwhile wages rose by just 9.8%.

In East of England, Cambridge is the council that has seen the biggest rise in rent prises. Between 2011 and 2017 prices of a 2 bedroom flat rose by 41.2%, to an average price of £1,200 per month. Meanwhile, wages in Cambridge rose by just 7.2%.

Other East of England councils with a significant gap between pay-rises and rent are; Watford, where rent has risen by 41.2%, yet wages have risen by just 10.6%; Hertsmere, where rent has risen by 37.1%, yet wages by just 10%; Luton, where rent has risen by 33.3% since 2011, and wages have risen by 16.7%; and Central Bedfordshire, where rent for a two-bedroom flat has risen by 32.5% to an average of £795 per month, whilst wages have risen by just 12.1%.

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 2017, the percentage change in rent-prices between 2011 and 2017, and the percentage change in monthly earnings between the 2011 and 2017. [See notes to editors for sources and defintions]

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 six years since 2011. The average increase for all the councils is 27.1%. By comparison average earnings in the same period rose by 8.8% in East of England. 

“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 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. 

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

ENDS

Contact: Keith Williams 07710 631 339 or Vaughan West 07967 342197 or GMB London Press Office 07970 114 762 

Notes to Editors:

1 Source: Private Rental Market Summary Statistics; Valuation Office Agency © Crown copyright 2017.

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.

2011 data is for the 12 months to the end of June 2011

2017 data is for the 12 months to the end of March 2017

2 Earnings data is from the Annual Survey of Hours and Earnings 2011 and 2017, Office for National Statistics. Monthly data is calculated from gross median annual pay for all full time employees by place of residence.