Londonland rents - a year later

One of the most popular posts on this site, as you can see from the sidebar, is my post from May 2012 about the average rents in each London borough. Admittedly a lot of traffic comes from google sending people here looking for a map of London boroughs, but anyhoo, its still an interesting topic.

Yesterday, on twitter Sarah retweeted comment from Emma Jackson about how rents in London were crazy and average rents in Newham had shot up 39% the last year. Alas this information came from a press release a year ago, but it got me wondering about what rents were like now that the Olympics is firmly in the past, and how rents have changed from last year.

So I dug out my old spreadsheet, went through the rightmove.com property website, and counted up how many two bedroom flats there were in each London borough at each price point, weaved some Excel magic and well here's a list of average rents last year and this year, and their percentage change.

London Borough	10 May 2012	08 May 2013	Change
Redbridge	£      1,080.05	£      1,193.77	110.53%
Hillington	£      1,112.92	£      1,201.08	107.92%
Merton	£      1,581.29	£      1,702.12	107.64%
Bexley	£         858.70	£         914.26	106.47%
Enfield	£      1,135.41	£      1,201.74	105.84%
Croydon	£      1,014.19	£      1,063.27	104.84%
Greenwich	£      1,332.97	£      1,387.40	104.08%
Waltham Forest	£      1,092.00	£      1,134.49	103.89%
Barnet	£      1,419.80	£      1,465.49	103.22%
Barking and Dagenham	£         967.14	£         994.93	102.87%
Ealing	£      1,578.19	£      1,606.16	101.77%
Sutton	£      1,029.41	£      1,046.86	101.70%
Southwark	£      1,840.94	£      1,869.72	101.56%
Hounslow	£      1,785.18	£      1,808.97	101.33%
Lewisham	£      1,224.56	£      1,236.24	100.95%
Kingston Upon Thames	£      1,402.73	£      1,412.13	100.67%
Brent	£      1,483.54	£      1,491.47	100.53%
Hackney	£      1,876.80	£      1,885.32	100.45%
Harrow	£      1,248.56	£      1,253.38	100.39%
Bromley	£      1,127.81	£      1,131.87	100.36%
Havering	£         967.49	£         963.83	99.62%
Kensington and Chelsea	£      2,856.73	£      2,820.08	98.72%
Lambeth	£      1,745.46	£      1,708.09	97.86%
Haringey	£      1,432.51	£      1,401.14	97.81%
Camden	£      2,359.67	£      2,307.76	97.80%
Newham	£      1,410.63	£      1,373.49	97.37%
Islington	£      2,217.82	£      2,139.80	96.48%
Westminster	£      2,796.06	£      2,696.96	96.46%
Wandsworth	£      1,844.08	£      1,756.62	95.26%
Richmond	£      1,927.33	£      1,834.90	95.20%
Hammersmith and Fulham	£      2,102.78	£      1,978.86	94.11%
Tower Hamlets	£      2,066.11	£      1,942.07	94.00%
City of London	£      2,817.34	£      2,474.32	87.82%

So, nothing too exciting there. From the raw data, it seems the increases and decreases Redbridge, Hillington, Tower Hamlets and City of London are caused mainly by either loads more properties coming onto the market since last year, or fewer properties being available.

On the whole, property in desirable boroughs is still more expensive than property in less desirable boroughs. Desirability here is mostly proximity to the centre of the capital city of the UK, which isn't really surprising. Kensington, Westminster, and City of London are still most expensive. Havering, Barking and Bexley are still the cheapest boroughs to rent in.

The average change in average rents for two bedroom flats since this time last year for the whole of London, by my calculations is about half a percent, so within the margin of error for the data.

More on Londonland rents

I'm still thinking about that article by Eva Wiseman about how her generation will never be able to afford to buy property and rents are too high. And I'm ploughing through the RightMove property website looking at rents in different London boroughs.

Here's a chart I put together

I spent most of my Bank Holiday Monday scraping the data to make that map, and then this morning found almost the same thing is on the charity Shelter's website here, apart from they're a bit presumptive, rather than labelling average rents they suppose that you need to earn about 2.5 times rent for it to be affordable. Which is where Eva Wiseman's figure of £67,669  to live in Tower Hamlets comes from. Its using a rule of thumb to come up with a very precise figure. How much of your income to spend on rent is a very personal choice, rather than something to be foised on you by a charity.

Anyhoo, I digress...

Of course the City of London has the most expensive average rents, how could it be otherwise, its the centre of the capital, and so, of course the boroughs neighbouring it are going to be less expensive but still amongst the most expensive in the country.

If you want to buy property and you're Eva Wiseman or one of her minimum wage call-centre friends then don't look at the most expensive places in London, look to the cheaper boroughs, the more affordable ones.

Its just a little small-minded to assume that all of the British Isles except the centre of london is uninhabitable.

Here's a table of rents culled from various searches on RightMove:-

Up to	£700	£800	£900	£1,000	£1,250	£1,500	£1,750	£2,000	£2,500	£3,000	£3,500	Total properties available	Average monthly rent
City of London	0	0	0	0	0	0	0	1	30	183	70	284	£2,817.34
Kensington and Chelsea	0	0	0	0	0	7	36	89	303	504	509	1448	£2,732.73
Westminster	0	0	0	0	0	5	80	175	526	471	644	1901	£2,649.53
Camden	0	0	0	0	1	44	187	185	342	213	132	1104	£2,261.44
Islington	0	0	0	0	13	57	158	165	236	183	70	882	£2,177.86
Hammersmith and Fulham	0	1	0	0	8	57	186	121	198	90	35	696	£2,045.98
Tower Hamlets	0	0	1	1	47	338	868	646	614	437	244	3196	£2,039.24
Richmond upon Thames	0	0	4	7	46	79	62	52	80	40	26	396	£1,876.70
Hackney	0	0	0	1	24	97	142	123	84	23	23	517	£1,836.94
Wandsworth	0	0	2	3	47	312	341	154	190	67	52	1168	£1,806.55
Southwark	0	0	0	3	106	167	223	144	130	62	26	861	£1,778.86
Hounslow	0	0	13	37	101	113	116	104	227	32	5	748	£1,756.28
Lambeth	0	0	1	10	98	211	208	108	105	64	21	826	£1,733.32
Ealing	0	2	3	15	96	298	160	69	75	14	7	739	£1,563.50
Merton	0	0	8	20	101	132	60	37	25	22	15	420	£1,555.48
Brent	0	2	2	7	82	118	148	30	10	3	0	402	£1,472.26
Haringey	0	0	2	14	150	106	99	25	23	4	2	425	£1,427.06
Barnet	0	0	5	35	245	296	132	37	19	19	7	795	£1,411.01
Newham	0	3	42	106	248	262	160	62	39	10	17	949	£1,395.84
Kingston upon Thames	0	0	0	15	113	111	34	9	7	4	6	299	£1,379.18
Greenwich	0	13	45	52	127	129	89	19	11	9	2	496	£1,318.35
Harrow	0	1	5	32	115	65	8	8	8	0	1	243	£1,248.56
Lewisham	0	2	32	62	159	95	24	18	2	4	0	398	£1,224.56
Enfield	0	2	13	60	301	66	6	0	0	0	0	448	£1,135.41
Bromley	2	4	44	75	132	68	9	1	0	0	0	335	£1,112.50
Waltham Forest	0	1	32	125	268	49	5	2	0	0	0	503	£1,092.00
Redbridge	0	0	23	51	53	9	0	0	0	0	0	136	£1,080.05
Sutton	0	0	23	51	53	9	0	0	0	0	0	136	£1,029.41
Croydon	0	3	92	164	129	21	2	1	2	0	0	414	£1,014.19
Barking and Dagenham	0	14	52	69	55	4	0	0	0	0	0	194	£967.14
Havering	1	16	68	52	44	11	0	0	1	0	0	193	£967.75
Bexley	1	29	58	19	8	0	0	0	0	0	0	115	£859.13

The table shows how many two bedroom properties there are to let at each price point in each London borough. For example, in Bexley there are 58 two bedroom properties to let at between £800 and £900 per month.

To use this table, first work out how much your household can afford to spend on rent each month, between a third and a half of your monthly income, then look at which boroughs have properties at that price point.

Easy peasy.

I get the impression that Eva Wiseman is a stroppy middle class snob frustrated that she can't afford to live in stylish and expensive Kensington and Chelsea, stamping her foot crying "But I don't want to live in Havering!".

What I don't quite understand though is how the number of properties available in each borough decreases as average rents decrease. For example, Tower Hamlets, one of the more expensive areas to live has over 3,000 properties available, and Sutton, one of the cheaper areas has only 136. Its like the opposite of supply and demand.

The Londonland property market

In the Observer today Eva Wiseman has a column about how many people of her generation will never be able to afford to buy a house or a flat or whatever.

Reading it makes blood pour out of every orifice because of how wrong she is.

Because for most people I know, owning a house will no doubt remain a fantasy. It's something that's become clear over the past few years – that those of us who live in cities, whose jobs are not secure, who are flitting from call centre to job centre and back again throughout our 20s and 30s, whose parents don't have property portfolios, those of us who are single, or still trying to do art or music or something they dreamed of, are unlikely to be able to afford the deposit for a flat. ...

In my borough, Tower Hamlets (one of the poorest areas in the UK), the charity Shelter calculates that the annual earnings a tenant needs to make renting a flat affordable are £67,669. It's a figure I find difficult to read out loud without lisping, let alone conceive of earning myself. It's not achievable – in fact, it makes me feel like I'm going a bit mad. And it highlights the ever-lurking threat of homelessness – that slow slide over a year from being made redundant, to being priced out of your shared flat, to carrying your rucksack between friends' futons, and then, after a clipped conversation in their little blue kitchen, sitting on a bench at dawn with nowhere to go.

I live up in Walthamstow, which is about three miles up the River Lee from Tower Hamlets, I live in a pleasant rented two bedroom flat and the annual earnings for our household is around £50,000, rent is £800 a month. If we bought the place the mortgage would be about £700 a month.

I spend hours ploughing through the RightMove property website in my spare time, putting together graphs of rents and house prices for different areas, because this entertains my otherwise dreary time.

Average rents in Tower Hamlets £1,777 a month compared to about £1,690 a year ago, they're about up 5% about in line with inflation.

However, Walthamstow, three miles away has average rents of about £1,200 a month, up from £1,100 a year before, so more than £500 less than Tower Hamlets.

Eva Wiseman's friends, flitting between call centre jobs, presumably on minimum wage, are unable to buy flats in expensive areas. What's the problem? Why can't they live in Walthamstow, its a lot more affordable, its got a Waterstones and a Sainsburys, and an Asda.

If they really want to own a house, why not try in an area they can afford, rather than an area they can't afford.

Further more, I've lived on minimum wage recently, its difficult, there's only one minimum wage, its the same in London as it is in the rest of the UK. London's hellish expensive, its the most expensive place to live in the UK, of course.

So, if Eva's friends are flitting between call centre jobs, why not do it where the minimum wage goes a lot further. Average rents in Motherwell, are £513 a month.

Minimum wage is about £1,200 a month. You can't afford to live in Tower Hamlets on your own, in Walthamstow you could live there, but would starve. In Motherwell, you could afford two flats and still have money for the pub.

Eva Wiseman's problem and that of her friends, is that they think the house prices in the middle of London are normal, when actually they are abnormal compared to the rest of the country. She ought to cast her eyes further afield.

If she's looking for affordable housing, why is she looking at the most expensive places

Elsewhere in "prime" London – Chelsea, Mayfair, Knightsbridge – estate agents say they are seeing a buying "frenzy". One was recently quoted as having clients who are purchasing their sixth properties, or one for them and another for the kids. He recalled a buyer asking if he had any homes for sale for £30m. "I had one at £50m, so I said: 'Is there room for movement?', and they said no – the other children had £30m spent on their properties, so it wouldn't be fair."

There's plenty of affordable housing if you don't focus on the the >£30m end of the market.

Fun with the Income tax threshold

Someone changed the office radio from Smooth FM to LBC today, and within second the office was seething with opinions about who's fault everything was:- parents, the police, ethnic concentrations in deprived areas, politicians.

Someone made a remark about how the Tories hate poor people, I'd just read Mark Pack's blogpost about how many Labour MPs voted against lowering the 50% tax rate, which had me thinking about how the Tories have massively helped poor people with last week's budget raising the income tax allowance, taking 2 million people out of income tax.

And that got me thinking about the income tax threshold generally, I believe in raising it to above the minimum wage is a great idea, taking all of the low paid out of tax, out of the employer's HR department even having to bother with the paperwork of taxing them, letting the low paid keep more of their hard earned money.

This blog says:-

We think raising the Income Tax allowance is the purest form of helping the poor.

So I took a look on the office of national statistics website for historical income tax thresholds, and then adjusted them for inflation and figured out which color of government were in power

Should it be adjusted for inflation, or adjusted by average earnings? Or some kind of mysterious cost of living index that takes into account the cost of living, other taxes, houses and so on? I dunno, I've adjusted for inflation cos it was easy to do with online tools.

The general idea is that if the government keeps the threshold level the same from one year to the next, because of inflation, it essentially means the threshold is lowered. Raising by the rate of inflation gives the patches of horizontal lines in my graph. The declining dots are when the government has kept the threshold at the previous years level and inflation has taken a bite.

This is my raw data:-

Year	Threshold	Inflation adjusted	Government
1953	£110	£2,491.00	Con
1954	£110	£2,416.00	Con
1955	£110	£2,373.00	Con
1956	£120	£2,478.00	Con
1957	£120	£2,362.00	Con
1958	£140	£2,658.00	Con
1959	£140	£2,581.00	Con
1960	£140	£2,566.00	Con
1961	£140	£2,541.00	Con
1962	£140	£2,457.00	Con
1963	£140	£2,356.00	Con
1964	£140	£2,310.00	Lab
1965	£200	£3,194.00	Lab
1966	£220	£3,048.00	Lab
1967	£220	£2,934.00	Lab
1968	£220	£2,862.00	Lab
1969	£255	£3,485.00	Lab
1970	£325	£4,215.00	Con
1971	£325	£3,961.00	Con
1972	£460	£5,124.00	Con
1973	£595	£6,188.00	Con
1974	£625	£5,950.00	Lab
1975	£675	£5,541.00	Lab
1976	£735	£4,858.00	Lab
1977	£945	£5,358.00	Lab
1978	£985	£4,826.00	Lab
1979	£1,165	£5,265.00	Con
1980	£1,375	£5,486.00	Con
1981	£1,375	£4,647.00	Con
1982	£1,565	£4,726.00	Con
1983	£1,785	£4,962.00	Con
1984	£2,005	£5,333.00	Con
1985	£2,205	£5,578.00	Con
1986	£2,335	£5,557.00	Con
1987	£2,425	£5,577.00	Con
1988	£2,605	£5,757.00	Con
1989	£2,785	£5,876.00	Con
1990	£3,005	£5,889.00	Con
1991	£3,295	£5,898.00	Con
1992	£3,445	£5,822.00	Con
1993	£3,445	£5,615.00	Con
1994	£3,445	£5,512.00	Con
1995	£3,525	£5,499.00	Con
1996	£3,765	£5,685.00	Con
1997	£4,045	£5,946.00	Lab
1998	£4,195	£5,998.00	Lab
1999	£4,335	£5,982.00	Lab
2000	£4,385	£5,963.00	Lab
2001	£4,535	£5,986.00	Lab
2002	£4,615	£5,999.00	Lab
2003	£4,615	£5,907.00	Lab
2004	£4,745	£5,883.00	Lab
2005	£4,895	£5,874.00	Lab
2006	£5,035	£5,890.00	Lab
2007	£5,225	£5,904.00	Lab
2008	£6,035	£6,517.00	Lab
2009	£6,475	£6,734.00	Lab
2010	£6,475	£6,798.00	ConLib
2011	£7,475	£7,848.00	ConLib
2012	£8,105	£8,105.00	ConLib
2013	£9,205	£8,560.00	ConLib

From looking at the graph and the numbers, it seems like the main step changes in the threshold level (from £2,400 to £5,900 and then to £8,000 in today's money) have occurred during Conservative governments. In fact, going by the past fifty years, where Conservatives and Labout have each had approximately 25 years in power, we can get these average increases in the threshold.
 

	Conservative and Libdems	Labour
Average	£207.23	£34.00
Median	£149.50	-£12.50
Sum	£5,388.00	£816.00

As a disclaimer, I'm not a Conservative voter myself, I just really like the idea of raising the income tax threshold to stop the government taking people's hard earned cash, and that seems to happen most during Conservative administrations.

Lowering wages of fuel tanker drivers

I understand from the BBC that fuel tanker drivers have voted to go on strike in a row over pay and conditions. As a contingency to prevent disription, the army are being trained up to carry out fuel deliveries.

Elsewhere, according to Wikipedia, the British army is set to downsize itself by about 15,000 folk by 2015.

Back to fuel tanker drivers striking:-

One of the companies involved, Hoyer, said its safety standards were very high.
A Hoyer spokesman said: "Hoyer has one of the highest health, safety and training standards in the petroleum distribution sector."
The firm said that pay and conditions for Hoyer drivers were among "the best in the industry", adding that the company's drivers earned on average £45,000 a year.

On the armed forces website, according to the payscales page, it takes someone of Warrant officer or Captain rank to earn £45,000. Privates earn between £14,000 to £25,000.

So as a result of the fuel drivers striking, the army providing contingency and downsizing, there's going to be a lot of freshly trained and experienced previously low paid potential fuel tanker driver.

Is this whole thing just a little going away present for the squadies?