Are rising rents stopping young people moving to cities?

Alex Johnson

bcf8f137da7abc8786696b13aa12cad5115e2d21 300x191 Are rising rents stopping young people moving to cities?Rising rents combined with Britain’s housing shortage are pricing young people out of areas where jobs are available, claims a new report from campaigners PricedOut.

Its figures suggest that young people who move from rural areas to certain ‘blackspot’ cities with more job vacancies will be slightly more than £1,000 a year worse off because of higher rents – in England’s nine top cities for job availability, employees were paid more yet spent an average 36% of their salary on rent. In the nine areas with least job availability, rent cost 24% of local average income.

Private tenants who work in England’s top cities pay £251 more in their monthly rent than the national average, but they only earn an extra £167 per month after tax, say PricedOut. In Hull, for example, the average rent of £325 is 21% of the average monthly income of £1,640, compared to Oxford where rental costs account for 41% of income.

The report says that, unsurprisingly, London has the highest rental rates as a proportion of income with renters likely to spend half of their income on rent resulting in a typical Londoner being £4,027 worse off.

“Britain’s chronic housing shortage is holding back young people desperate to start their careers,” said TUC General Secretary Frances O’Grady. “Unless we start building more affordable homes now, people will continue to get trapped in employment blackspots because they can’t afford to move to where the job opportunities are.”

Record levels of £5m+ home sales
According to Savills, record number of homes worth more than £5 million changed hands in 2013 in London. Their figures show there were more than 500 sales at over £5 million last year, a 24% increase on 2012. Above the £10 million mark, there were over 160 sales, 25% higher than 2012. Most of the sales were in SW1 (Knightsbridge, Belgravia, St James’s), W8 (Kensington), SW3 (Chelsea), and SW7 (South Kensington).

Debate to reduce Help to Buy limit to £300,000 is ‘futile sideshow’
Cutting the maximum purchase price under Help to Buy phase two to £300,000 from £600,000 to reduce demand would have very little impact on the scheme, according to Rightmove.

“The scaremongers who cite phase two of Help to Buy as a potential factor in fuelling price rises should note our research showing it is of very little help to the majority of buyers in the higher end of the price brackets,” said Miles Shipside, Rightmove director and housing market analyst. “Estate agents report the take up of Help to Buy backed traditional high loan to value mortgages is mainly outside London and the South East, with the benefits being felt further north where frustrated first-time buyers, trapped sellers and the wider market requires aid most. On average so far, people have been looking to buy homes worth £160,000 under the scheme.

“This means that a call to reduce the price limit to try and help lessen buyer demand, especially in London, wouldn’t really make a difference. London attracts more than its fair share of cash-rich and overseas buyers, and in the grand scheme of its structural housing supply shortage, the debate on Help to Buy’s influence is a futile sideshow.”

Pictured is a two bedroom mews home for sale in Mcleods Mews, London SW7, on for £1,200,000 with Lurot Brand

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  • pobinr

    Typical of the Independant.

    Don’t even mention mass immigration for being why rents are rising.

    Is immigration a good or bad thing?
    Well let us just test this out.

    In a class of thirty children, if say 12 don’t speak English, does this improve our education? No.

    If your doctor or nurse cannot speak English, does this improve your hospital care? No.

    Does sending child benefit to kids in Poland who will never come to Britain improve our finances? No.

    Does undercutting British workers improve their employment propects? No.

    Does sending their spare cash back home to their own country help our balance of payments? No.

    Does accessing every benefit under the sun improve our economy? No.

    Does filling our cities up with aggressive beggars, doorway sleepers and cardboard livers, improve our towns? No.

    Does importing crime improve our safety? No.

    Does giving council housing to immigrants before our own citizens appear fair to our own tax payers? No.

    Does clogging up our maternity wards so that they are unable to cope with the numbers help our own people? No.

    Do millions more people needing a place to live help solve the housing shortage? No.

    Do millions more people on our roads ease traffic congestion? No.

    Just where oh where, are these great benefits of immigration?

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