Londoners earn more money than people living in any other city in the UK, according to the Express. But their finances are being hit hard by one thing; their rent. City A.M reports that more than 86% of people living in the capital can’t afford the average cost of rent. But why is it so tough for them to cover this cost?
Rising property prices
The average Londoner has a rental budget of £860, however, the average rent in London currently sits at £1,058. Last year, rental prices in London rose by 9.4% compared to the previous year. They’ll rise even further this year, if predictions from Property Reporter are to be believed. They project an average rise of 5.5%. Even house buyers are feeling the pinch. For the first time in history, the average price of a London property is £520,000. It’s not all bad news though as rental costs in the City of London, Camden, and Westminster are still lower than they were at the start of 2020.
Debt & late payment fees
Londoners are racking up a severe amount of debt. It’s so high that a study has found they’re likely to die owing an average of £243,445. One of the main reasons for this is that it’s expensive to live in London. Yahoo! reports living costs are as high as £2,270 per month. Another problem is Londoners are paying lots in late payment fees on buy now pay later schemes. It was recently revealed that 37% of Londoners have to pay late payment fees, compared to 23% nationally. Debt can make it tricky to afford rent due to the upfront costs needed, so it’s best to pay off something like a late payment fee quickly. My Quick Loan UK advises “Sometimes you may find yourself in need of instant quick loans – whether it’s an overdue bill, a little extra cash for that family holiday, or a lump sum to pay for some much-needed home improvements.”
It’s been greatly reported that energy prices could rise by 50% throughout 2022, which has resulted in Londoners budgeting less for rent and more for their bills. Londoners are already at an advantage as they have some of the cheapest energy bills in the country. The Express reports they pay around £769 per year for electricity, while Merseyside and North Wales are at the top end of the scale and pay £800. Another bill set to rise this year is council tax. The biggest ever council tax price rise in London is due to take place in April. In December, the mayor of London, Sadiq Khan, announced that council tax bills will go up by £31.93, which means the typical bill will now be £400.
By living in the capital, Londoners have great earning potential. But there’s no denying that it’s expensive to live in the city and that many locals are finding it tricky to make ends meet.