Figure 13 shows how PRS rents in London vary and how this compares to earnings, providing an indication of rent affordability in Hackney compared with other local authorities (no data are available from this source for the City of London). The chart shows monthly rent levels for a two bedroom property as a percentage of full-time earnings in the borough, based on the lower quartile for both earnings and rents.B  Other studies, using a different data source, have found that Hackney has the fifth highest ratio of gross earnings to rent on this same measure (behind Kensington & Chelsea, Westminster, Camden and Islington). 2

Figure 13: Lower quartile two bedroom PRS monthly rents as a proportion of lower quartile monthly gross earnings (2014)

Figure 13: Lower quartile two bedroom PRS monthly rents as a proportion of lower quartile monthly gross earnings (2014)

Source: ONS Annual Survey of Hours and Earnings

Note: Confidence intervals not provided. Gross earnings data is not available from this source for City of London and Lambeth (one of the statistical peer boroughs)

Levels of rent in the private sector are becoming increasingly unaffordable for many local people (see the Local Data section on Affordability and Availability). Private rents in Hackney increased by an average of 27% between April 2013 and September 2015, whereas the rise in the level of support available through the Local Housing Allowance has been fixed at 1% for the last two years. Rents for bedsits have increased even more significantly over this period, by 62%.

Median PRS rents in the City have risen by 23% since 2012.

Figure 14:  Affordability of private rented accommodation in Hackney (2011-16)

Figure 14:  Affordability of private rented accommodation in Hackney (2011-16)

Source: ONS Annual Survey of Hours and Earnings and ONS House Price Statistics for Small Areas

Note: the City of London is not included because annual income data is drawn from a survey and response rates are too small to be accurately included

Figure 15: Ratio of house prices to annual income, comparison to statistical peers (2016)

Figure 15: Ratio of house prices to annual income, comparison to statistical peers (2016)

Source: ONS Annual Survey of Hours and Earnings and ONS House Price Statistics for Small Areas

Note: Confidence intervals not provided. The City of London is not included because annual income data is drawn from a survey and response rates are too small to be accurately included

Notes

  1. The term ‘quartile’ is used to refer to a range of a quarter of the values. The lower quartile for a dataset is the value where 25% of the data is lower and 75% of the data is higher.
  2. The term ‘quartile’ is used to refer to a range of a quarter of the values. The lower quartile for a dataset is the value where 25% of the data is lower and 75% of the data is higher.

References

  1. Trust for London, “London’s Poverty Profile: Rents and Affordability”
  2. Trust for London, “London’s Poverty Profile: Rents and Affordability”