The right wing think tank the Adam Smith Institute has launched something called the Cost Of Rent Day.

The institute has calculated that private tenants are working 197 days of the year solely to pay their rent; this is calculated to be the day on which, on average, renters in England earn enough before tax to cover their annual rent bill.

This analysis of local areas shows Cost of Rent Day is even later in England’s major cities and the South East.

The average Cost of Rent day in London is July 16, more than two months later than the national average, which fell on May 5. 

The institute says it has created this measure in order to translate the severity of the housing and rental crisis into simple terms that can be easily understood by all audiences. It claims it also provides a useful measure to hold politicians to account and track changes over time. 

To calculate the Cost of Rent Day, annual rents were divided by gross annual pay, to understand what proportion of earnings are spent on rent.

The institute says the root problem is the lack of supply. 

Since the 1970s, England’s construction of new homes has lagged behind population growth. In other words, new demand has outstripped supply. “Even if the government manages to deliver on the 1.5m new homes by the end of this Parliament, we will still be short of delivering the 4.3m backlog” claims the institute. 

It warns against “punishing all landlords or introducing policies such as rent controls will only make the situation worse for renters. Instead, politicians must focus on creating the right incentives for developers and landlords, and on increasing supply.”

The ASI has previously called for beefed-up compulsory purchase powers to buy and develop what has now become known as ‘grey belt’ sites close to railway stations, for example.

A spokesperson says: “We all know that rental costs in England are just too high. But alarmingly, as our research shows, the rental crisis is even worse in our capital city where Cost of Rent Day falls over two months later than the national average. 

“This means that higher salaries, which many professionals have historically moved to London for in the first place, do not compensate for the higher rent prices that they face. 

“In the midst of a cost of living crisis and nearly two decades of stagnation, London’s ‘Cost of Rent Day’ is a damning indictment on the performance of our economy, and our failure to match the demand for homes with supply in the Capital.

“Concrete proposals to reform our sclerotic planning system and to deliver the homes we need must be an urgent priority for both the government and opposition parties.”