By Tony O’Reilly-
Londoners have experienced a higher rate of inflation than the rest of the UK in part due to soaring rents, according to new City Hall figures.
While the UK’s rate of inflation jumped to 10.1 per cent in July, City Hall analysis has found that underlying inflation has “consistently” been 1.5 per cent higher in London than the rest of the country over the last six months.
The analysis found that rental prices in London are a “major factor” behind the higher rate of inflation, with asking rents for new rentals in London “growing faster than anywhere else in the UK”.
According to Rightmove’s rental price tracker, the average asking rent per month in London during the past three months is £2,257, representing an annual increase of nearly 16 per cent. Those high asking prices are proving very difficult for average Londoners.
Inner London has seen the average asking rent per month rise to £2,693 – 21.1 per cent higher than last year. Those prices are only affordable to high earners with good jobs, apart from the few who work just to pay their rent, bills, and food. A small percentage of renters fall under that bracket, but the vast majority are in above average decent well paid jobs. Individuals below that wage line rely on support from the state through council housing to occuoy inferior accommodation to those being rented at high monthly charges.
Rising Food Costs
Rising local food costs is one of the key pressures pushing the capital’s underlying inflation above the national average. This will affect Londoners on the lowest incomes the hardest as they spend a larger proportion of their income on food.
London rental prices are also said to be a “major factor”: the Rightmove Rental Price Tracker indicates asking rents for new rentals in London are growing faster than anywhere else in the UK, up as much as 15.8 per cent annually in the last three months.
This inflationary pressure is only set to grow as more people renew or move out of contracts that may have been kept at a lower price for longer due to the pandemic. Sadiq has suggested a range of measures the Government should implement now to ease the cost of living crisis for Londoners. These include:
The introduction of an energy ‘Lifeline Tariff’ for the most vulnerable Londoners, providing the minimum energy needed for a household to function for free, with any charges kicking in only once a minimum use threshold had been met. Introducing a two-year rent freeze for London’s 2.4m private renters, which would act as a first step towards devolving full rent control powers to cool London’s overheated private rental sector.
Extending the provision of healthy free school meals to all primary school children during term-time with free meal vouchers available for those in most need during the school holidays.
Restoring the £20 Universal Credit uplift, which Ministers removed in September last year, pushing 130,000 more Londoners into poverty
Mayor of London Sadiq Khan has called on the Government to “step up” and provide support for low-income Londoners who are “living on the front line of the cost of living crisis”.
Mr Khan said: “I’m doing all I can to support Londoners, but we need the Government to step up. this must include doing more on energy bills to ensure no one has to make the choice this winter of heating their home or eating, increasing benefits in line with inflation, and giving me the power to implement rent controls in London.
“Whoever becomes the next Prime Minister must make tackling the cost of living for Londoners – and people across the country – their top priority.”
Khan wants the Government to implement a rent freeze in London to help combat the cost of living crisis, something which has been echoed by campaign groups including Generation Rent and Acorn.
Calls for a rent freeze have grown in recent weeks after new figures found that 40 per cent of under-30s are now spending more than 30 per cent of their salary on rent, representing a five year high.
A Government spokesperson said: “We know that rising prices caused by global challenges are affecting how far people’s incomes go, which is why we are providing £37 billion worth of help for households which is being phased in throughout the year.”