Apparently, full-time employees work until the beginning of May just to pay their year’s rent. BBC News analysis shows that someone on a middle income in England would have to work 86 days to pay off the annual rent on an average two-bedroom property. This is five more days than in 2011. Tenants in Scotland and Wales are luckier. The number of days needed to pay their rent has fallen to 79 days in Scotland and 71 in Wales.
The English Housing Survey shows the number of households living in privately-rented accommodation has hit a 30-year high. That demand and a limited supply of decent housing have pushed up rents. Increased costs for landlords also have to be passed on to tenants and, as the Residential Landlords Association says, property owners are not making a fortune from their tenants. For many tenants, wages have decreased or remained stagnant in real terms, which means they have to work for longer to pay their rent and other bills. Obviously, the problem is much more acute in London and its commuter towns. For instance, someone working full-time and living in Greenwich will now see their rent take up every penny they earn until August 16. That is an increase of 42 working days, compared to 2011. The average wage is £25,834 after tax and the average annual rent is £16,200. In the north, it is much easier for tenants, although tenants in parts of Manchester are also working until the beginning of May to pay the rent. However, in Lancaster, a tenant would be working until April 18 to pay the rent, which is seven days less than in 2011.
Whilst some people earn a London Weighting Allowance, the difference in wages between the north and the south isn’t sufficient to pay the increased rents. Many people are unable to move to the jobs they would like in the south because they cannot afford to live there, which is bad for the economy. Something needs to be done to redress the balance. Build-to-let properties are being built, but not quickly enough to meet the ever-growing demand. Introducing stamp duty on second homes could also deter landlords from investing in properties in areas of high demand and, could therefore, keep property prices high.
With investment and infrastructure such as better transport links between the major cities, people would be able to move further afield and commute to work. Home working could also be encouraged for many people. Technology certainly exists for more people to work remotely more of the time. If this was the case, landlords could be more willing to invest in areas outside of the prime commuter zones. People could live further north, these regions would benefit and the UK economy overall would be healthier too. The policies need to be joined up so that the housing, transport and business strategies work together. It makes sense to encourage investment outside the overheated south-east, but it needs to work for the benefit of the families and professionals who live there and the people, such as landlords, who invest there.
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