Key workers in London are facing increasing difficulties affording rental properties, with new research highlighting the severity of the issue across the capital. Generation Rent has called on the Mayor of London to intervene and introduce measures to control soaring rents that are pushing essential workers out of the city.

Key workers priced out of London’s rental market

Research conducted by Generation Rent reveals that nine categories of key workers—including teachers, nurses, and bus drivers—would fail standard affordability checks required by letting agents for the average one-bedroom property in every London borough. The data shows that average wages for these workers amount to less than 2.5 times the average rent, a threshold commonly used to assess affordability.

In seven London boroughs, the average annual rent for a one-bedroom home exceeds the yearly income of a hairdresser, with Kensington and Chelsea standing out as the most expensive area. There, the average monthly rent of £2,595 equates to 138% of a hairdresser’s annual salary of £22,641.

Across Greater London, the average rent for a one-bedroom property is £1,688 per month. This represents 40% of a community nurse’s income, 71% of a receptionist’s income, 80% of a pharmacy assistant’s income, and 79% of a teaching assistant’s income. At the other end of the spectrum, Bexley offers the most affordable average rent at £1,138 per month.

Calls for urgent action to control rents

Dan Wilson Craw, deputy chief executive of Generation Rent, emphasised the critical role key workers play in maintaining London’s infrastructure and wellbeing. He stated: “London is one of the richest cities on the planet, but it depends on the key workers who clean up after us, take care of our sick and elderly, and drive our buses to where we need to go.”

He added, “London needs its key workers if the city can continue to thrive, but those workers cannot stay in a city that demands an arm and a leg for a place to recharge after a hard day and build their life from.”

Wilson Craw urged the Mayor to be granted powers to “slam the brakes on local rents” to provide key workers with the necessary breathing space to live and work in their communities. He also highlighted the importance of increasing the supply of affordable and social housing in London to alleviate the crisis.

Mayor’s stance on rent controls

London Mayor Sadiq Khan has previously advocated for rent controls as part of new devolution powers. However, he acknowledged that discussions with the Labour government have met resistance, with ministers described as “not keen” on implementing rent controls. Despite this, Mr Khan has committed to continuing his efforts to secure these measures.

What this means for landlords

The rising unaffordability of rents for key workers presents both challenges and opportunities for landlords in London. While high rents may appear financially advantageous in the short term, the potential loss of essential workers from the city could impact local communities and the broader economy. Landlords may need to consider the long-term sustainability of rent levels and the benefits of supporting affordable housing initiatives.

Moreover, any future introduction of rent controls or increased social housing could alter the rental market dynamics. Staying informed about policy developments and engaging constructively with local authorities will be crucial for landlords and letting agents to navigate these changes effectively.

Source: Based on reporting from Property118

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