All but those earning over £90,000 are expected to be priced out of the Inner London boroughs by 2035, affordable housing charity Dolphin Living has projected.
London’s population is expected to exceed 10 million by 2035, with a rise of 345,000 people in Inner London alone.
With current supply of new homes in London only meeting 40% of estimated need, the affordability crisis is set to worsen worse.
According to Dolphin Living, to solve this affordability crisis which threatens the future of London’s economy, London must see the delivery of tens of thousands of new homes for sub-market rent, aimed at those median earners (household income of between £45,000-£90,000) who are not eligible for social housing yet are priced out of the housing market.
Olivia Harris, chief executive, Dolphin Living, said: “As of today 900,000 households in London cannot afford market housing that meets their needs, yet don’t qualify for social housing, with Inner London alone accounting for 200,000 of those. In 10 years’ time, due to population growth, that figure is expected to increase across Inner London by 43%.”
“This means that thousands of new jobs in key sectors like health, education and tourism are likely to go unfilled as median income workers are effectively priced out of the housing market and look to live and work elsewhere. The economic impact will be most acutely felt in Inner London, given 73% of those jobs will be within Inner London.
“However, there are solutions, but they involve a change in approach. We need to build more homes for workers on median incomes to support those who currently cannot afford housing that meets their needs as well as the hundreds of thousands of new workers. Homes for intermediate rent for workers on median incomes in Inner London should be a key focus within future housing and economic growth policy.”
By 2035, 200,000 new workers will be needed in sectors such as healthcare, education and the arts.
Jacqui Daly, director of Savills Research, said: “London’s housing crisis is worsening, with those on lower incomes bearing the heaviest burden.
“There has been a persistent mismatch in the supply and demand of new homes in London. Reduced housebuilding combined with high prices is putting further pressure on already stretched resources and household budgets.
“Decisive government intervention is needed to support housing demand, and a step-change is essential to create a more affordable and sustainable housing market for Londoners.”