Wednesday, 18 December 2013

Living Illegally

According to an LBC phone-in I was listening to the other day in the car, even the most basic studio flat is £1,000 + per month (bills exclusive) to rent in London nowadays and that is not even in zone 1 or 2, so add a few thousand a year travel to get to work on top of that.

This made me wonder how all the low-paid workers (legal and otherwise) manage to live and work in central London - those typically on under £15k a year such as cleaners, hotel workers, security guards, sales assistants.

Apparently when not living in hostels or on friends' floors, a growing answer is garden sheds. Also many (typically asian) landlords are allegedly buying up semi-detached houses in the suburbs and housing four to a room, one in each corner at £25 per week and passing them off as family homes, even though the denizens might be total strangers to one another. This circumvents the legal requirement that all multi-occupational houses be licenced as HMO's and adhere to stringent regulations on occupancy levels, H&S, fire and room sizes rented out.

So it is not just a question of British workers not wanting to accept employment for breadline-level wages. They are also refusing to occupy sheds or live four to a room to sustain this false situation, which is illegal anyway and would garner no formal housing assistance or wage credits for them. And on the subject of family credit and other wage top-ups, this is also enabling minimum wages to endure with the government subsidising businesses to pay as little as possible with no prospects for betterment in sight, even when the company might be prospering and able to afford to pay better.

What will happen to the London economy when its councils finally get their thermal imaging helicopters out and clamp down on all this illegal living I wonder?

Already those on the 'average wage' - said to be £26k - are deserting the capital in their droves, claiming they cannot afford to live there. And certainly with over 50% of their income going on rent and travel (not even counting the bills), they are way over the Joseph Rowntree Foundation recommendation that no more than 33% of income should be expended in rent and bills, or poverty will ensue.

Some while ago I was at a London party at a friend's flat. Half her friends couldn't afford to go anywhere or enjoy London after they had struggled to pay the rent on their shared house room and the other half were earning good salaries but worked long hours and had no leisure to enjoy London. Between the two groups, hardly anyone was enjoying the fact they were living in London and all moaned endlessly about the tubes,what zone they lived in, the crowds and other irritations of their lives.

22/12/13 Since this posting, there has been another article in the Daily Mail entitled Beds in Sheds


Steve said...

I guess the other part of the problem is people at the top end of the pay scale being happy to pay such ridiculous prices and bumping up the price range just to guarantee their own exclusivity.

Marginalia said...

I'm tempted to say we're fucked.

London is another country or three. There is extravagant, stratospheric wealth. The Beckham's have just bought a West London Property for £44 million. All things ultra high end are booming.

There are the quite wealthy middle-classes, helping places like ours ,Walthamstow, get some spit and polish. There's the not so wealthy middle and artisan classes being squeezed as benefits, that in supplementing their salaries and wages provided a reasonable life style, get withdrawn. And there is the "Victorian" poor, living in conditions that Dickens would recognise.

Then there's debt. In many cases making a bad situation frightful. And this Government (any Government) appear to be in denial. We are told things are improving the country's wealth is growing. It may well be, but that improvement is skewed. Average wage increase over the last 12 months is less than 1%. Average wage of £26k, but that hides a huge divergence.

What is revealing is to look at average percentage wage increases since 2008 and compare that with inflation. In each year from 2009 wages have grown substantially less than inflation. In 2011 wages grew by 0.4% inflation by 4.5% a factor of 10.

These are average wage increases. Many of the low paid, low skilled received no wage increases or pay cuts and in many cases their individual inflation was substantially higher than the national figure.

Company profits, dividends and company cash piles are growing. Banks are given cheap money to strengthen their balance sheets, but millions are excluded from banking services because of their poverty - enter Wonga et al. However, they are the scape goats: it is our politicians, those who have, at least, the ability to change things but don't who should be pilloried.

But they get off. As I said at the beginning we're fucked.

Steerforth said...

Marginalia is "right on the nail", as they now seem to say.

We have to stop non-doms treating London property as a useful part of an investment portfolio, tax second homes at a rate that can be used to build public housing and ensure that migration is at a level that encourages the property market to cool down.

We also have to make renting more attractive. Our obsession with owning property is a relatively modern phenomenon. Let's stop making people feel like failures unless they're on the property ladder, legislate against corrupt landlords and free-up unused buildings for public housing.

Wisewebwoman said...

The discrepancies in income, the 1% vs the 99% are all driving this unrealistic state of existence.

Selling this "dream" is driving the unsustainability of our current way of living.

It is insane.


Nota Bene said...

London is a's going to become a 'gated estate' with everyone outside the M25 knocking to come in. I can't be too hypocritical because as a landlord, I benefit...but not even I think it's realistic and sustainable. There is a real problem with foreign buyers snapping up large swathes of flats because they don't have to pay capital gains on the barmy is that?

The Poet Laura-eate said...

Blogger keeps losing my comments but let's hope third time lucky!

Steve, you are absolutely right. Misguided families are helping their offspring pay over-inflated prices for property which is is making things even worse for everyone else/ succeeding generations.

Marginalia. Superb points. Depressing but all too true. The gap between rich and poor grows ever wider despite decades of liberalism.

Steerforth and Notabene, it is completely outrageous that wealthy non-doms should be exempt from capital gains (or indeed any penalty at all for pricing the doms out of their communities, and typically to buy properties which will remain empty for large swathes of each year. When in London you can see large banks of each block which seldom have any lights on and you know are mostly empty in a city with such high housing need. Notabene, yes indeed I also see a South Sea bubble scenario emerging re property prices.

WWW - the growth of the super-rich is even more disturbing and causes an even more outrageous distortion between rich and poor.