£875 per Month Average Rent for Two Bed Flat in South East: Up 25% Since 2011 Compared to 8.1% Pay Rises GMB Congress Told

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 the South East increased by 25% to an average of £875 per month, whilst over the same period, monthly earnings increased by just 8.1%.

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 have risen by just 9.8%.

In the South East, Epsom and Ewell is the council that has seen the biggest rise in rent. Between 2011 and 2017 prices of a 2 bedroom flat rose by 31.6%, to an average price of £1,250 per month. Meanwhile, wages in the council have decreased 4.8%.

Other councils in the South East with a significant gap between pay and rent are; Guildford, where rent has increased by 25%, yet wages have increased just 8.6%; Windsor and Maidenhead, where rent has risen by 14.8%, yet wages by just 4.2%; Elmbridge, where rent has risen by 26.3% since 2011, and wages have decreased by 2.5%; and Brighton and Hove, where rent for a two-bedroom flat has increased by 27.8% to an average of £1,150 per month, whilst wages have increased by just 8%.

The figures for the 67 South East councils are set out in the table below. This is from a new study by GMB Southern Region of official data from the Office of National Statistics (ONS) for 67 councils in the South East. 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. [See notes to editors for sources and definitions]

Paul Maloney, GMB Regional Secretary said:

&quotThese official figures show increases in average rents for two bedroom flats of 20% or higher in 37 of the 67 South East councils, in the six years since 2011. The average increase for all the councils is 25%. By comparison average earnings in the same period rose by 8.1% in the South East. 

&quotThese high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation. 

&quotAs a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents. 

&quotIf employers don't respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market. 

&quotIt 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. 

&quotPolicy 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.

&quotThese 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. 

&quotThe 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. 

&quotHigher pay especially for younger workers is now an essential part of the solution."

ENDS

Contact: Michelle Gordon 07866 369 259 or GMB Southern Press Office 07970 114 762

Notes to Editors:

1 Source: Private Rental Market Summary Statistics; Valuation Office Agency © Crown copyright 2017.

The data is collected by the Valuation Office captured during the course of Rent Officers’ statutory responsibilities to administer functions related to Housing Benefit (LHA and LRR schemes) and Universal Credit on behalf of the Department for Work and Pensions.

Landlords and letting agents provide VOA Rent Officers with data about the properties they let. This information is captured electronically in the VOA’s lettings information database. Checks are carried out at the point of entry to ensure that any Housing Benefit funded tenancies are excluded from this database.

Two Bedroom self-contained properties with two bedrooms including houses, bungalows, flats and maisonettes.

2011 data is for the 12 months to the end of June 2011

2017 data is for the 12 months to the end of March 2017

2 Earnings data is from the Annual Survey of Hours and Earnings 2011 and 2017, Office for National Statistics. Monthly data is calculated from gross median annual pay for all full time employees by place of residence.