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Housing crisis: Nurses and teachers priced out of UK regions by rising rents

Tenants in London aged 22-29 spent more than half of their income on private rents last year

Ben Chapman
Tuesday 16 July 2019 09:15 BST
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Nurses’ wages would need to increase by around £10,000 a year for current rents in the capital to be considered affordable
Nurses’ wages would need to increase by around £10,000 a year for current rents in the capital to be considered affordable (iStock)

Nurses, teachers and other key workers are being priced out of parts of the UK after years of rising rents and below-inflation pay increases, a report has found.

Private rents are now unaffordable for workers on the median wage in London, the southeast, southwest and east of England, according to the report by the consultancy firm PricewaterhouseCoopers (PwC). Housing is considered affordable if it takes up 30 per cent or less of pre-tax income.

The problem is particularly acute in London where rents take up 42 per cent of the average pre-tax wage. Young people and those working in certain key public sector professions, many of whom earn less than the average wage, are increasingly unable to afford living in the capital and surrounding areas, PwC said.

Millions of public sector workers received a pay rise last year but it was not enough to make up for eight years of austerity measures when salaries shrank in real terms.

Tenants in London aged 22-29 spent 53 per cent of their income on private rents last year on average, making it almost impossible to save up for a deposit on a home, PwC found.

John Hawksworth, chief economist at PwC, said: “Concerningly, we risk seeing professions that are integral to the UK’s public services struggling to afford to rent in several regions in the UK.”

In Scotland and Wales, private rent levels are more affordable across professions, with rents taking up between 15 per cent and 22 per cent of average wages, although this may not be true in hot spots like Edinburgh or Cardiff, the report states.

The amount spent on rent has grown 8 per cent over the last five years while earnings growth remains relatively weak, meaning housing has become less affordable for renters.

“This is not only having an impact on social mobility, it will also hinder national productivity growth in the longer term by preventing people from moving to places in the UK where they can be most productive,” said Mr Hawksworth.

Prison officers had the worst rental affordability ratios of any key workers in London in 2017-18, with rent taking up 45 per cent of income. For primary and nursery school teachers and nurses, the figure is around 40 per cent.

For the latter, median wages would need to increase by around £10,000 a year for current rents in the capital to be considered affordable, the report’s authors calculated.

Rents are also unaffordable for many professions in the rest of the southeast, ruling out commuting to the capital from further afield.

Robert Walker, partner and UK housing leader at PwC, said: “Looking ahead, reducing the cost of housing – both renting and purchasing a house – should be a priority and government and business should work together to improve affordability by increasing the supply of properties to put downward pressure on property price inflation. One lever the government could pull would involve working with housebuilders to ensure that the target for 300,000 new homes a year in England is met.

The report calls on the government to look at more innovative approaches to reforming housing such as a programme in the Netherlands that gives university students free accommodation in exchange for volunteering.

Crowdfunding could also open the property market up to more people, helping to incentivise house building, while taxes on homes should also be simplified, the report said.

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