Employers need to pay higher wages to help staff as rents are growing at almost double the rate of pay, union bosses claim.
A study by the GMB union, looking at the average rents of two-bedroom flats in England, found that tenants have seen increases of 18.2% between 2011 and 2017 to £650 a month, while wages have improved by just 9.8% on average over the same period.
The union is warning that employers may face staff departures as employees leave to find jobs with a salary that can keep up with rental increases.
The research claims that between 2011 and 2017, rents in London – where wages are up 9.1% – are up 25.9% to £1,500 a month on average.
Rents have increased 25% in the South-East to £875 a month, compared with pay rises of 8.1%, while tenants in the East of England have seen 27.1% increases to £750 a month compared with pay rises of 8.8%.
Warren Kenny, regional secretary for the GMB, said: “These high rents are here to stay. So too are younger workers living for longer in private sector rental accommodation.
“As a direct consequence, employers must be prepared to pay much higher wages to staff to enable them to afford these much higher rents.
“If employers don’t respond with higher pay they will face staff shortages as workers, especially younger people, are priced out of housing market.
“It 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.
“Policy 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.
“These were sold off – but crucially not replaced as a matter of Tory dogma. Housing benefit 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.
“The 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.
“Higher pay especially for younger workers is now one essential part of the solution.”
Comments (2)
If the unions were that concerned they would be lobbying government to reverse the crazy schemes such as additional stamp duty, higher taxation of landlords & banning tenant fees.
It is the introduction of all these schemes along with a constant barrage of legislation which landlords and agents have to deal with which is forcing private landlords to leave the industry and those remaining to put up rents.
Just wait and see what happens in 10 years’ time when government has decimated the PRS and just a handful of corporate landlords control the market! You only have to look at how poorly the large housing associations perform to see what is coming and all because not one single government wants to do anything about the PRS; all too busy trying to satisfy the whining charities and tree huggers to get votes next time around
You can only pay higher salaries if you take more revenue. The public don’t want to pay more for goods and companies (and high street) are haemorrhaging from the internet cheapies or Government involvement. There will always be the haves and the have nots, that is a reality. The housing shortage for the lower paid is a problem that has never been addressed by any political party and all parties are now moving into taking over the private sector to bail them out, but in doing so are making a right mess of things that is hitting those same lower paid citizens by discouraging rental property ownership or landlords recover costs through rent increases of 3% per annum, is to be expected. The only solution is to build more council houses, where is the money to come from? They can’t even afford to repair a pot hole in the road!