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Living Rent 'will only provide small discounts outside inner London', says report
Renters in outer London will see only small discounts from Sadiq Khan’s London Living Rent policy, according to a report by Lichfields.
The policy, which Labour would roll out nationally if they were to win today’s general election, will provide homes to Londoners who can’t afford to buy at a third of local household incomes.
In inner London, Lichfields found this would be a significant discount on market rent. On average, London Living Rent would be 62% of private market rates in wards in inner London.
In outer London, however, where the disparity between incomes and market rents is not so great, London Living Rent would be on average 76% of market rent, a similar level to that for homes already available for affordable rent.
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The report also noted that London Living Rent has the potential to create local market distortions. Since rents will be set according to average incomes at ward level, the report points out that it will create arbitrary borders.
In neighbouring wards, rent levels could be very different. For example, London Living Rent for a two-bedroom flat in Stockwell is £998 per month, but in neighbouring Queenstown it is £1,497.
The report points out that this could influence development decisions, making areas with higher London Living Rents more attractive than other areas, even though residents might not see a real distinction between the two areas.
The report does not specify where the split between inner and outer London is found. The Greater London Authority was contacted for comment.
