Is London affordable? The rise of rental prices
While the cost of living may be going down in London, the same cannot be said for the price of rent. Rent prices continue to rise in the capital.
The north-west has seen a decrease in rental prices of 3.2%, but London has seen a converse 7.7% increase in the last year. While this is lower than the 10% increase seen in the previous year, it still makes London at odds with other parts of the country's decreasing rent statistics.
Cost of living 2010-2015: While the Consumer Price Inflation stagnates, the rental prices continue to rise. (Source: LSL)
So, what does this mean for the tenant living in London?
Data from the Office of National Statistics shows that the average weekly wage in the same time period has gone up by just £10. Granted, Londoners are liable to earn twice as much as the national average, but even accounting for this, it is apparent that the cost of renting in the capital appears to be rising faster than wages.
The government's answer to the current proportion of a wage being claimed by rent is the National Living Wage, which came into effect on 1st April. Outside London this might have a tangible effect.
The average rent for a one-bedroom flat outside of the capital is £525 per month. A tenant who is paid the National Living Wage, which will be initially set to £7.20 an hour, and who lives outside London, will spend an average of around 45% of their earnings on paying rent if they work 40 hours a week.
With the same number of hours and wages applied to a Londoner, 99% of their wage would be spent on rent, of which the average for the same property is over £1,000 a month.
Wile most of the jobs in London are held by commuters, a good proportion can still afford the convenience and appeal of city centre living.
London, after all, is the destination to be for the best (and best paying) job opportunities. While the national living wage might not be a feasible financial state for a person living in London, the quality of work available in the capital always ensures there is the opportunity to earn more.