Key workers being priced out of renting, PWC report says

Many key workers in London and the south east are being priced out of private rented accommodation, with some spending more than half their monthly income on paying to live in their homes.

A report by consultancy firm PwC said the conventional benchmark for affordable rent was that it should cost less than 30% of gross annual income.

Workers would therefore need to earn £23,800 – and increase of £400 a year compared with 2017/18 – to afford the median private rent in the UK, the report said.

Rent in London and the south east was outpacing earnings growth raising rental affordability ratios.

PwC said the average affordability ratio in the capital could hit 47% within four years, from 42% last year. Tenants in the capital aged between 22 and 29 currently spend around 53% of their salary on rent.

But PwC’s report warned the problem was not confined to London and the south east, with key workers in the east and south west also being priced out.

The last five years had seen rental affordability ratios deteriorate, the report added, with the amount spent on rent across the UK rising by 8%, while earnings growth remained relatively weak and below levels seen before the financial crisis of 2007/08.

Of key workers in London prison officers had the worst affordability ratios last year at 45%, with primary and nursery school teachers and nurses on 40%.

For the second group wages would need to rise by £10,000 a year for current rents to be considered affordable, the report added.

James Murray, deputy London mayor for housing and residential development, said: “Key workers make an invaluable contribution to the capital, and we will be far worse off as a city if they are forced out through high rents and being unable to buy a home.

“The mayor is using all the powers he has to build new council homes, homes for social rent, and homes for first-time buyers and last year we started a record number. But government must play their part too, by providing us and councils with the funding and powers to build far more, and by overhauling the private rented sector which is not fit for purpose.”

A spokesperson for the Ministry of Housing, Communities and Local Government said: “We want a housing market which works for all, that’s why we are investing £9bn in building more affordable homes and have built 408,000 affordable homes since 2010, of which 308,000 are for rent.

“In April we changed the law to protect renters right now by capping tenancy deposits and banning unfair letting agency fees.”