Londoners need to be earning more than £76,000 a year to afford an average privately rented home in the capital, a report revealed on Tuesday.
Properties in vast swathes of the city are becoming off-limits to key workers, young families and those on lower incomes, research by the G15 group, which represents London’s largest not-for-profit housing associations, showed.
The data shows that two nurses on a salary of £38,000, sharing an averagely priced rented two-bedroom home, would be unable to afford market rents in almost half of London’s 32 boroughs.
A young family with two adults each earning the average salary of £44,370 would find six boroughs out of reach without some sort of rent support, based on the formula that an affordable level of rent equals no more than 30 per cent of gross income.
Westminster was London’s most expensive borough, where renters would need an eye-watering £124,240-a-year salary — outstripping even the top 10 per cent of earners.
On average Londoners need to be earning £76,261 to afford the average private rent in the capital, the Funding London’s Affordable Home report found.
Fiona Fletcher-Smith, chair of the G15, said: “London is built on a vibrant mix of people from all walks of life, but the capital is increasingly unaffordable for many.
“A healthy London is one that provides room to grow for all Londoners. For key workers and young families to be locked out of many parts of the city is hugely damaging from a social and economic perspective.”
G15 claims the 289,000 homes for social rent provided by the capital’s housing associations save Londoners £4.8 billion, with rental payments on average 70 per cent lower than market rates at £130.27 a week.
For the one in five Londoners on the very lowest incomes, social rent is 28 per cent of their wages compared with the 94 per cent it would be without support.
Government grants for social rent homes have been cut by 60 per cent since 2010, the report states.
In plans welcomed by councils, the new Labour Government has promised a house building boom to “kickstart economic growth and get Britain building again”.
Mayor Sadiq Khan has been asked to “deliver record levels of housebuilding” with government support.
The capital will be expected to build 80,000 new homes a year, with a focus on social rents.
Ms Fletcher-Smith added: “With the Government setting an ambition for new homes in the capital, it is critical that our housing supports Londoners at all income levels. Social rent homes are a vital part of the mix, and housing associations are ready to work with the Government to provide the affordable homes London and Londoners so desperately need.”
