Here is what you really need to earn to rent a 1-bed in each postcode.
TotallyMoney.com has mapped the real minimum wage needed to rent a 1-bed in all 120 London postcodes. Each figure (as seen below) represents the hourly wage that an individual must earn working 37.5 hours a week, for a one-bedroom rental, without paying more than 50% of their income.
While the Mayor’s definition of ‘affordable’ is spending 35% of your income on rent, for many Londoners it’s far from reality. Findings include:
- Abbey Wood, a South East London area in Zone 4, is the only postcode out of 120 that is affordable on Minimum Wage.
- Meanwhile, the London Living Wage only affords you 2 out of 120 postcodes: Abbey Wood and Enfield in Zone 6.
- George Osborne’s annual Minimum Wage raise of 3% is only half of that forecast for rent at 6% per year.
- In gentrified areas such as Stratford and the Tower Hamlets’ postcode of E14, you’d need to earn £39,500 and £52,800 a year respectively.
- To live in EC3, London’s most expensive postcode, you would need to work 106 hours a day on Minimum Wage.
With around 700,000 people in the capital earning less than the Living Wage, that’s a lot of people chasing a decreasing amount of cheap properties.
As the gap between the wages people earn and the price of decent housing widens, the calculations speak for themselves. Rental costs have grown significantly in recent years due to a number of factors, the main being supply failing to keep pace with demand, stagnant wages and rising house prices.
This research clearly demonstrates the scale of the housing crisis in London and how the increased minimum wage, and even the London Living Wage, is no longer enough to live on in the capital.
Notes:
Key data from Home.co.uk
Figures calculated using TheSalaryCalculator.co.uk