34. Weekly Newsletter
Rental affordability hits new low
Rental affordability in the UK has hit a new low as tenants are having to spend 28.8% of their gross income on rent. Furthermore, rent as a proportion of wages has risen by 2.2% over the last year which is the worst it has been in the last seven years. The Office for National Statistics defines rent as being “unaffordable” if it reaches 30% of gross income and rent is becoming increasingly closer to this on a national scale. In areas such as London, it has already reached this mark as rent is at 31.7% of income. This has been a significant increase in the last few years as back in only 2019, it was below 25% on a national scale.
Managing director at PriceHubble, Sandra Jones has stated there is a huge “problem with affordability” naming a few reasons why such increases have occurred including regulatory changes and more people wanting a spare bedroom so they can work from home. Sadiq Khan, Labour mayor of London has called for the government to give him the power to put rent controls in place in London where the rent is highest in the UK. However, the government has ruled out imposing such controls in order to prevent housing investors as well as the potential for supply and quality of rental housing.
Newspapers
Some of the British headlines from the past week are:
- Financial Times- ‘Universal in talks over UK incentives for Bedford theme park’
- Financial Times- ‘New wave of UK strikes looms as pay deals spur unions to bargain harder’
- Financial Times- ‘UK government plans fresh investment in supercomputing despite axing aid’
- Financial Times- ‘Scotland’s net fiscal deficit widens to £22.7bn’
- Financial Times- ‘International students to return in smaller numbers to UK universities’
- The Times- ‘City watchdog fines PwC £15m over London Capital & Finance audit’
- Sunday Telegraph- ‘Labour’s winter fuel savings to be wiped out by £4bn benefits bill’
UK retail rebound
The amount of goods sold in the UK rose by 0.5% between June and July following a month of 0.9% contraction according to figures by the Office for National Statistics that came out this week. ONS stated that retail sales grew in July which was as a result of an increase in sales in department stores and sports shops due to the football European championships and the Olympics. Many stores had widespread discounts which also helped in “boosting sales”. The previous month had poor figures due to a fall in sales in clothes stores as well as petrol stations bringing in fewer sales “despite prices at the pump falling”.
