“Real London” is a short-hand, of course, for a London that is not the shiny one of glass and steel built and sold by property developers, and bought by those in the top few percent of earners — as well as by foreign investors. It is a world of workers, some of whom live in their own houses, having secured mortgages before the boom that began in the late 1990s, and often well before that, when it was still affordable for working people to take out mortgages and be able to repay them. Others live in social housing, built by local councils and run either by the councils or by housing associations, or, less frequently, owned or owned and managed by co-ops, and others have to cope with the increasingly greedy, unregulated private rental market . And amongst them, of course, are the unemployed — part of the current total of two and a half million unemployed people in the UK as a whole. According to the London Skills and Employment Observatory, 1.38 million people are currently either unemployed or “economically inactive” in London, and the unemployment rate is 8.9 percent.

These workers and homeowners were, perhaps, on salaries between the median and the average — currently £14,000 and £26,000, as I discussed in my article, The Housing Crisis and the Gulf Between the Rich and the Poor: Half of UK Workers Earn Less Than £14,000 A Year — but whereas in the past it would have been possible for a household on average or below average wages to buy a house, now it is completely impossible.

As I explained in a recent article, Unaffordable London: The Great Housing Rip-Off Continues, on a multiplier of three times earnings, which was how the housing market functioned before the Blair and Brown boom years, a couple buying a house in London for the average price — £388,000 — need a combined income of nearly £130,000, or something slightly less plus a whopping great deposit. Read the rest of this entry »