Renting in London or buying a property elsewhere

Owning a home is the dream of many people all over the UK, who are currently trapped in the rental market.

New figures released by the Office for National Statistics (ONS) show that the UK house prices surged by 11.7 per cent in the year to August 2014 and they are increasing strongly across the country, with prices in London showing the highest growth once again.

Besides, the amount of money paid by first-time buyers in August were 12.9 per cent higher, on average, than they did a year before.

In England and Wales the average cost of a home is £272,000, while Londoners who want to get on the property ladder have to pay £514,00 on average, with most properties standing well above the £210,00 price of a starter home.

Not surprisingly, in most cases only a six figures salary can guarantee a mortgage to secure a home in the capital. Yet, the average London wage is £33,000.

No wonder that there has been an increase of 50 per cent of rented households over the past five years, according to data released by the English House Bulletin.

Mayor of London Boris Johnson, who addressed housing issues at MIPIM UK on October 15, said:

“ There is a deep and understandable sense of social  injustice because the cost of a home, the most basic of human needs, seems to recede beyond people’s reach.

“The real solution to the problem is to build hundreds of thousands more homes, beautiful homes, family homes (…),  homes that are affordable for all Londoners and I am very proud (…) as we have not only build so far a record number of affordable homes (…). This year we will build more homes in London than in any year since 1980”.

Being more specific about the number of houses to be built in the future, Mr Johnson unveiled a plan to deliver 500 thousand new homes for London in the next ten years, including town centre regeneration projects.

However, during  a more recent meeting of the London Assembly, that took place last Wednesday, the Mayor of London revealed that his target of March 2015 for completing 55,000 affordable new homes would not be met. Instead, the likely date for completion would be the end of next year.

Tube strike called off

Millions of commuters are relieved as the 48-hour strike planned by London Underground (LU) workers has been called off.

Mick Cash, the new general secretary of the Rail, Maritime and Transport Union (RMT) has announced valuable progress in talks at conciliation service Acas had been made.

Members of the RMT Union, who had been due to walk out at 9am on Tuesday, have been taking their stand against LU’s plan to close ticket offices and redeploy staff on concourses and platforms, since the beginning of 2014.

Many Londoners remember the two tube strikes that took place early this year, causing serious disruption for London businesses and passengers, while another strike announced by RMT Union was called off  in May.   

At issue was the same set of proposals over the modernisation of the Tube.

Phil Hufton, London Underground chief operating officer, has defined the strike action ‘pointless’ in such circumstances.

Not only the demand for ticket offices will fall even further with the recent introduction of contactless payments, but LU  has promised a job for anyone who wants to stay with them, with no loss of pay.

Moreover, around 200 new jobs would be created by next year through the capital’s 24-hour weekend service, starting in September 2015.

The RTM Union boss broke the news just one day after Mayor of London Boris Johnson had unveiled the next generation of driverless trains, which will be phased in from the early 2020s.

Welfare freeze

The Government would cut social security spending by £3 billion, if the Conservatives won the next general election, due  in May 2015.

George Osborne, Chancellor of Exchequer, has promised freeze on benefits in his speech to the Conservative Party conference, that was held in Birmingham on Monday.

In order for the country to pay its debts and drive down its deficit, 10 million Britons will have their benefits frozen for two years, while 18 to 21-year-olds could claim unemployment benefits for a limited period of time only. Measures also include plans to lower limit by £ 3,000 to £ 23,000 on households.

“Welfare spending makes up a third of the entire Government budget. We are going to live in a country where the elderly have dignity in retirement and the vulnerable and people with disabilities are protected. But we can’t afford to live in one where we spend £100 billion on welfare payments for people of working age. (…) it is not sustainable for any nations and it is not fair, either”, Mr Osborne said.

Talking about Britain’s economy in 2010, he added: “Four years ago our country was on the floor (…) but we picked ourselves up, we sorted ourselves out and we got back in the fight.  We set out a long economic term and worked through it (…). I believe it is perfectly possible for Britain to be the most prosperous country on earth”.

Just two days after the Chancellor’s speech, Prime Minister David Cameron promised tax cuts worth more than twice that and with inflation predicted to be running at around 2 per cent, it will mean a real terms cut, to reduce the deficit.

Meanwhile Work and Pensions Secretary, Iain Duncan Smith, is testing prepaid cards for benefits claimants, that could only be used to buy food and other essentials.

The ‘smart cards’, meant to stop claimants from spending benefits cash on drink and gambling, were previously blocked by Liberal Democrats, who considered the plan to be a way to stigmatise people and reduce their freedom to spend money as they wish.

“Benefits paid should go to support the wellbeing of their families, not to feed their destructive habits”, has highlighted Mr Duncan Smith, referring to those parents who have fallen into drug or alcohol addiction.