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.
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.”