In a time of universal deceit, telling the truth is a revolutionary act
New research by Centre for London’s Commission on Intermediate Housing has revealed that London’s housing market is on course to become unaffordable for modest earners.
Fair to Middling examines current housing policies, and argues that these are failing people on low-to-middle incomes.
The report argues that intermediate housing - that is sub market housing catering to people on modest incomes - could help to ease London’s housing crisis, but currently amounts to less than 2 per cent of housing stock in the capital. Westminster, for example currently has 1,600 intermediate homes compared to over 27,000 social rented homes.
By examining six fictional households on modest incomes, including a primary school teacher, a bus driver and an electrician, and charting the relationship between their earnings and house prices in four London boroughs between 1998 to 2014, Fair to Middling found that on present trends:
● The Senior nurse household and teacher households will find London unaffordable to buy in within two years, while an electrician will only be able to afford Barking and Dagenham, and Enfield.
● Kensington and Chelsea is now unaffordable for all six households, and has been for all households except the hospital doctor since1998
● Only the doctor household and the solicitor and journalist household can now afford to buy in Haringey, but they will be priced out of the market in 2016 on present trends
The report goes onto suggest that the cost of housing is making it increasingly challenging for employers to retain and recruit staff in the capital. Taking nursing as an example, Fair to Middling reveals that vacancy and turnover rates have increased over the last three-year period and in parts of the capital are now between 15 per cent and 20 per cent.
The findings point to a concerning trend; the hollowing out of London’s modest earners. Fair to Middling shows that very few people on modest incomes who don’t already own a home can now afford to live in the many parts of the city.
The Intermediate Housing Commission notes that subsidies required for intermediate housing tend to be comparatively small, and argues that an increased supply of intermediate housing could help London to create mixed-income, resilient and successful communities.
It calls on councils and housing associations to work with developers, employers and lenders to increase the supply of housing - both for sale and rent - affordable to Londoners on modest incomes.
Ben Rogers, Director at Centre for London said: “Ever increasing rents and property prices combined with high costs of living have hit London’s modest earners hard.
“As a result, the capital it is increasingly finding itself home to the endies – people who are Employed but with No Disposable Income or Savings.
“As this report argues, more needs to be done to help London’s modest earners to find decent and secure homes in the city. Failure to provide affordable homes for modest earners will create a hollow city, with only the richest and the poorest of our society able to live in the centre.”
Cllr Rock Feilding-Mellen, Deputy Leader of Kensington and Chelsea, co-chair the Intermediate Housing Commission said:
“London’s magnetism draws hundreds of thousands of people from across the country, and indeed the world; but as new housebuilding fails to keep up with demand and prices spiral ever upwards, many more households are finding themselves unable to afford to live here.
“One major draw of the capital is its unique character, created by its interwoven mixed-income neighbourhoods.
“To help preserve that mix, subsidised public housing must now also be used to help those working households on low-middle incomes - the nurses, teachers, bus drivers, mechanics, engineers, programmers, entrepreneurs, and all the rest - who cannot now otherwise afford to live in this city.”
Cllr Claire Kober, Leader of Haringey, Co-chair of the Intermediate Housing Commission, said:
“London can only maintain its claim to be a great world city if the people who live and work here can afford to take advantage of all it has to offer.
“It is crucial that as a place, London works for everyone, irrespective of their income and circumstances. This report demonstrates that is not the case for a significant proportion of the capital's population.
“As public policy makers, we need to address this growing imbalance and give people access to the homes that currently feel are beyond their reach and ensure that we protect our richly diverse communities”.
Marianne Fallon, Head of People at KPMG said:
“At KPMG we believe that decisive action needs to be taken on the issue of housing affordability. Across the UK, first time buyers are increasingly unable to take a step onto the housing ladder, with the situation even more chronic in London. And with rental costs spiralling too, we really are at crisis point.
“As a large employer we recognise the impact this situation has on our staff as well as our communities, and are delighted to support the launch of the Centre for London’s report to consider solutions for families with low- and middle-incomes.
“For those who are struggling to afford a home, the impact is huge, not just affecting them in the here and now, but also potentially affecting their family’s social mobility for generations – it’s time for that to change.”
Martyn Evans, Creative Director at U+I, formerly Cathedral said:
“In the debate about how we’re going to house the poorest in our city and how we’re going to deal with the impact on the market of those buying property at the top end of the scale, it’s easy to forget about the people in the middle.
“This important report attempts to tackle the problems faced by the huge, largely unidentified group of people who earn ‘decent’ incomes but who are still challenged by the crazy house prices the property market in London dictates.
“This group makes up the lion’s share of London’s workers and London’s voters. A group we should all be listening to.”
The Westminster News Ltd