Wednesday, October 19, 2011

Well, I for one welcome our new overlords.

Families now spend half their income on rent

Property rental costs are at their highest level ever and now account for nearly half of the average British family's monthly earnings, according to figures published today. The average rent has risen to £890 a month – 46 per cent of the typical tenant's net income. In London, rent accounts for more than three-quarters of average earnings. Landlords in the capital charge an average of £2,075 per month, while the typical household brings in £2,721 in net monthly income.

Posted by sibley's b'stard child @ 02:04 PM (1909 views)
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9 thoughts on “Well, I for one welcome our new overlords.

  • mark wadsworth says:

    It’s Ricardo’s law of rent as modernised by Herny George.

    The most important figure is net income after taxes and after rent (privately collected tax), which is pretty flat wherever you are in the UK (we have free movement of people and labour, so gains by moving to a high wage area are competed away). According to their figures, about two-thirds of the higher after tax wages are soaked straight up by landlords.

    So it’s hardly surprising that people in a low wage area (£1,500) only pay a third in rent, because they keep £1,000 to live in and rents are £500. In a high wage area (£3,000) people spend two thirds on rent, because they also keep £1,000 to live on and the rest goes on rent of £2,000.

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  • how does £860 represent 46% of someones wage when the average take home pay is around 1600 per month

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  • MW this is indeed a great example of the law of rent .

    So the innescapable conclusion is that the system does not work for the majority of people because even if the fruits of their labour are not creamed off before they receive their pay , they are afterwards .

    The rich get richer and the poor get poorer .

    It must be remembered that one of the big costs of this skimming is that people are making precisely zero provision for their old age – because they are unable to even if they wanted to .

    I’d like to see people being compelled to save for their old age (and having access to the same schemes as public servants do) so that less money would be available for the landowners to skim .

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  • Rent controls are bad…. do I even need to explain why?

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  • Rent controls created Peter Rachman. (OK, his parents did.) He bought up houses where the tenants benefited from statutory rent controls, thus buying the house cheaply. Then he forced out the sitting tenants and rented the house out again, usually to immigrants, thus making a huge GRY. Do you want to make Rachmanism profitable again? I won’t be signing your petition.

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  • @khards, done!

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  • Totally barmy.

    But a situation that suits the UK ruling elite, who want to keep housing expensive for political reasons – and also want to avoid bankers having to realise bad loans.

    It is just another nail in the coffin of UK plc.

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  • There’s no story here. Landlord’s have increased rent and in doing so have increased defaults and voids.

    A solvent tenant should be able to negotiate with a sensible landlord (who would prefer a stable rent to hope) rent on a par with that acheived 3 years ago.

    Interesting point at 1 tho.

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