London is on the verge of a labour crisis as low-paid workers are unable to afford sky-high London room rents, it is claimed.
According to flat share website SpareRoom, for tenants on the London Living Wage there is not one postcode which can be classed as affordable – ie, where rent costs no more than 35% of take-home pay.
Even the cheapest postcodes for renting, including Thamesmead in SE28, are out of reach for those on the London Living Wage of £9.15 per hour.
Realistically, tenants earning this would have to budget more than half their take-home pay for rent.
The average weekly income on the London Living Wage is £292.69 after tax, while the average weekly room rent has risen by 6% in the past 12 months to £164.31 – resulting in tenants forking out 56% of net income.
Tenants whose postcodes start with a W face paying £810 per month in a shared property.
In east London, the average monthly room rent is £676, while in the N and NW postcode districts average rents are £635 and £721 respectively.
Apprentices face being priced out of the rental market altogether. A room in London’s cheapest postcode at £480 a month is £38 more than an apprentice earns.
Matt Hutchinson, director of SpareRoom, said: “We’ve reached a point where the housing crisis is driving the lowest paid workers out of the capital.
“Even the cheapest way to rent, flat sharing, is officially unaffordable to them across the whole of London.
“The sad irony is that those on the Living Wage are what keeps London ticking, and they need to be able to afford to live in the city that depends on them. Rising rents are forcing many to live hand to mouth or, increasingly, forcing them out.
“Apprentices are in an even worse position.
“London is quite rightly celebrated for its vibrancy, diversity and creativity. To protect that, we must make it affordable to live in, otherwise it’ll turn into nothing more than a theme park for the rich.
“The Government needs to take action to make sure the capital doesn’t face a labour shortage that could paralyse the heart of the British economy.”