The problem with the London living wage

TL;DR: It's still not enough to live in London.

The London living wage was calculated in November 2014 at £9.15 per hour for the coming year.

It is higher than the national Living Wage of £7.85 per hour, to accommodate for higher living costs Londoners face compared to other people living in other regions.

Unlike the compulsory national minimum wage, it is a voluntary commitment made by employers, who can become accredited by the Living Wage Foundation as 'living wage employers'.

Over 400 London employers across all sectors are now paying the London living wage, a figure that has doubled since November 2013.

There's just one problem, however: Not a single postcode in London can be classed as ‘affordable’ to those on the London living wage.

Affordable rent is typically classed as no more than 35 per cent of take home pay being spent on rent.

Even the cheapest postcodes to rent in – Thamesmead, SE28 (£480 per month), and Edmonton, N9 (£505 per month), are, by this criteria, out of reach for people on the living wage.

Renters would have to budget 38 per cent and 40 per cent respectively of their net income for accommodation.

Meanwhile, apprentices working in the capital simply can’t afford to rent on what they earn - a room in Thamesmead is still £38 more than an apprentice earns.

Matt Hutchinson, director of SpareRoom.co.uk, who compiled the figures, said:

We’ve reached a point where the housing crisis is driving the lowest paid workers out of the capital.

Even the cheapest way to rent, flatsharing, is officially unaffordable to them across the whole of London.

The Government needs to take action to make sure the capital doesn’t face a labour shortage that could paralyse the heart of the British economy.

An overwhelming 97 per cent of renters in shared accommodation told us the Government isn’t doing enough to make housing affordable – it looks like they were right.

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