Friday, 25 April 2014

Homeownership out of reach for Londoners

More than half of all Londoners currently renting their home believe they will never become homeowners.

A poll of almost 1,000 Londoners across 33 boroughs for council umbrella group London Councils also highlighted the continuing housing shortage in the capital, with three quarters of respondents saying there is not enough decent accommodation.

Of all renters, 60 per cent said they would never get a foot on the property ladder, with 50 per cent of all private renters holding the same belief.

Four fifths of Londoners disagree that housing will become more affordable over the next two years.

The average house price in London in March 2012 was £343,522, up 0.7 per cent from the previous year. Last week, data from lettings agency network LSL Property Sevices showed London rents had reached a record high, with the average monthly price standing at £1,038.

London Councils’ executive member for housing, mayor Sir Steve Bullock, said: ‘This poll shows that many Londoners who rent their home feel they have been priced out of the housing market for good.

‘London is currently in the throes of a housing crisis and this survey illustrates that there is an acute shortage of affordable accommodation, resulting in rising rents and house prices that are steadily increasing beyond the reach of first time buyers and families who want to rent.

‘More new homes need to be built at the right size, in the right place and at the right price, and the market is still not delivering this.’

Meanwhile, another study published by the Green Party, showed that high private rents are pricing many people out of the market in London.

Young people on the national minimum wage can only afford average rent in a shared flat in four of London’s 33 boroughs, while an adult on minimum wage would be unable to afford a two-bed flat anywhere in the capital.

‘It’s appalling that working people are being priced out of swathes of London by rent rises,’ said Darren Johnson, a Green Party member at the London Assembly. ‘The mayor has failed to recognise that private rented housing is simply too expensive and insecure in London.’

Readers' comments (10)

  • Progressive Solutions Required

    These people need not be concerned for the great Lord Shapps has already solved these issues. Thanks to his timely inteventions and speaches developers are at this very moment building thousands of new homes, and all of those homes will be affordable. Thanks to his supporting press and media friends, all the nasty poor people have been justly found to blame for living in houses that they did not deserve, and are well on the way to being appropraitely re-housed in rooms rented from the private sector pals of the Minister.

    Even those being paid minimal wages in the heart of the Capital need have no concern nor fear as Shapps has already made it a simple matter of chosing which B&B or Hostel to live in and expend that majority of ones income to. So great is this way of living that he has also made it perpetual, as there will be no opportunities of advancement.

    What are people worrying about. They asked for a Tory Godfather, and they got one.

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  • Rick Campbell

    I know little about London's housing crisis other than that which I read via the IH threads.

    I gather from previous posts that London is not only a dreadful place to live but is very expensive even in comparison to the 'posh' areas around here in leafy Cheshire.

    I also gather that London holds a special place in the employment with there being what used to be called "London weighting allowance" or something similar.

    The article suggests that there is a crisis as people cannot afford to live in the accommodation available and some councils were in such a quandry that they were 'shipping' people to various parts of the country.

    It is an indictment of bad governments that people on the legal minimum wage cannot afford to live in the accommodation availabe -- so this government decides to cure the problem by providing would-be home owners to purchase these much needed homes (supposedly built to house generations of families) at a whopping discount.

    Ir really is a bad thing that those living in state owned properties who also own properties and land elsewhere (i.e. outside London) do little only exacerbate the problems highlighted in the article.

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  • The slightly simplistic way of looking at it is that housing is very expensive in London and the cost of living in London is very expensive.

    whilst many think there is a north/south divide - in many respects this isn't true because if you live on benefits in London you get the same amount as elsewhere but unfortunately you will pay out more for your food, housing etc which is why at least one in three children in london live in poverty.

    i used to work in Southwark on the estates. you could see large highrises for miles around all in a shocking state of disrepair.

    and yet, many in London who are poor are in work but still reliant on benefits so they work many hours and still live in poverty. the only difference is that because they are in work they don't see their kids.

    this isn't to say things aren't bad up north - just to say that things are certainly as bad down here for millions in the cramped capital.

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  • C'mon Sense

    1000 Londoners across 33 boroughs is hardly representative of a city containing 7.2m - I always have an issue with extrapolation of data from a small sample.

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  • Rick Campbell

    I suspect (got one of my tin foil hats on) that this is a further step in the grand plan to ensure that London becomes a great millionaire-metroplis to rival those in the Middle East and to keep the "lowly" under the cosh.

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  • Matt Murdock

    Just a quick word on the sample size.

    Surprising though it may seem this is a sufficient sample to be 95% confident that the results are accurate to a level of +/-3%.

    The 95% confidence level is the industry standard for research of this nature and the confidence interval of +/-3% is generally thought to be acceptable. To reduce this to +/-2 you would need a sample size of 2400 to reflect a population of 7.2m

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  • Trevor Galley

    Simon wards comments:
    Two new surveys underline the problems young people are facing getting on the property ladder.

    HSBC’s Moving Home Survey found that only 12% of the 2,000 people it surveyed were thinking of moving home this year.

    And 10% of the people under 34 who were interviewed said they didn’t want to own a home. Of the others, 29% said they couldn’t raise a deposit, 15% said they were concerned they wouldn’t be able to get a mortgage and 14% were worried about their employment prospects.

    The HSBC survey found that people in London were most likely to buy or sell in the next six months.

    That finding is echoed by a Santander survey that found that people in London were most positive about being able to buy a property this year. People in the east of England and Northern Ireland were least confident they would be able to buy.

    But this survey also highlighted young people’s worry that they wouldn’t be able to raise a deposit, with 42% of 18- to 34-year-olds saying this is the main reason they won’t be buying.

    The Santander survey’s respondents were pretty mixed about prospects for the housing market this year. Nearly half (48%) thought their home’s value would stay the same, with 29% thinking it would rise in value, 17% predicting a fall and 6% saying they didn’t know.

    Unsurprisingly, given prices in London have held up well despite the overall UK market stagnating, Londoners were most confident their home would increase in value. People in the north west of England were least confident of any rise in their property price.

    Sadly a quarter of Londoners live in private rented homes - those that are homeless get a sea side view. However, London's Mayor described private renting as “the first choice” for people who move to London , sadly its the main option option and not the favorite.

    The Hills review found that 72% of private tenants would rather own their own home, while only 8% would continue renting privately as their first choice and other research suggests that many more people might prefer to rent if the sector guaranteed a decent home, security and stability, and freedom to change and improve their home , a right (for the moment) that social tenants and home owners enjoy.

    Oh the cost of homelessness is growing.

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  • How many Londoners are indigenous?

    Why does it appear that everything is concentrated in the London area?

    Why do you need so many government departments in London?

    Why do so many corporations have HQs there?

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  • Evan Owen | 26/06/2012 11:15 am

    Because London is a capital city. Almost all the other capital cities in the world have the same concentration of burocratic centre, because capital = concentration of state power... Some institution have alread moved or are moving out of London either entirely or some of their departments (because of costs or to meet better public demand), like the BBC to Manchester... But I guess Cameron would not like to move his Downing St pad for a PM residence in Birmingham - as it is just a convenient couple of minutes walk to the Parliament... You could have more public institution moving out of London (which I would support), but it would not change anything in terms of housing demands as London is the financial heart (city) and the richest cultural city of UK and historical home to many communities...

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  • Progressive Solutions Required

    @ Evan Owen | 26/06/2012 11:15 am

    'How many Londoners are indigenous?'

    Define indigenous. If you mean can trace their ancestors back to the first settlers the the answer is zero. If you mean were born here or were born British or Commonwealth with citizenship rights or European with residential rights then probably the greater proportion.

    'Why does it appear that everything is concentrated in the London area?'

    Partly this is because of the Unified Business Rate making it as cheap to be in London as anywhere else. Previously, pre-Poll Tax, councils could set attractive rate relief to attract commerce to their areas. Historically though, and geographically, the Romans set the trend by establishing a commercial settlement that was within easy communication with the rest of Europe and served by essential resources of the time. The proximity to Europe, the access to trade routes, and the availability of a resident workforce remain key attractions.

    'Why do you need so many government departments in London?'

    Because it is the seat of government - however, you are ignoring the disbursement of government departments throughout the country, including the former industrial areas which are now suffering again from public sector cuts this time around.

    'Why do so many corporations have HQs there?'

    See the comment about the UBR left over from the Poll Tax. HQ's? In some cases these are nothing more than regional offices for the international owners who's HQ will be wherever it is tax-advantageous to be. In other cases, because they need to pay the piper and the piper lives in Whitehall, then it saves them the commute.

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