London’s population is expected to grow to 9.8 million by the middle of the next decade, but according to a joint study released by the university of Westminster and housing charity Dolphin Living, a failure to provide homes that key workers can afford, could cost the capital billions a year.
The definition of ‘key worker’ given in this report ranges from nurses and teachers to emergency services employees, civil servants and those behind London’s vast tourism industry, and data has shown that providing subsidised rental homes to these employees, supplies the capital with £27,000 per household. Key workers add to the overall economy not just through their spending power, but most of all through the productive contribution they make to society, which far exceeds the salary they take home.
It’s a known fact that since the 2008 global financial crisis, rental growth has raced ahead of wage inflation, and although this has impacted everyone across Britain, it has especially been difficult for those in the public sector where, in some roles, wages have remained frozen. According to the report, key workers are already moving out of London as a result of rising housing costs, and if they were all to move away, the local economy would not only lose out on £9.6bn, but it would especially have alarming social ramifications.
Sadiq Khan, Mayor of London, has recognised the urgency of dealing with this problem, and has come up with a scheme called London Living Rent, a government fund set to increase the supply of affordable homes. This new type of tenancy will be aimed at helping average earners save for a deposit by offering them a below-market rent.
Although many have criticized this new system, by urging the government to instead come up with a scheme for personalised rents, housing associations and councils can now start applying for a share of the £7bn fund.