New research shows a 41 per cent reduction in the number of London properties available for private rent since the Covid-19 pandemic.
The analysis – which claims to be the most comprehensive study yet published of London’s private rental market – was undertaken jointly by the London School of Economics and Savills.
The umbrella group of local authorities called London Councils, which was one of the organisations commissioning the analysis, estimates that 166,000 Londoners are homeless and living in temporary accommodation arranged by their local borough.
It also claims that on current trends, London will see its highest ever number of homeless households in temporary accommodation by the end of the summer.
Key findings from the LSE and Savills research include:
- Rental listings have fallen across London, with the number of one, two, and three-bedroom properties listed for rent in both inner and outer London down by around 36 per cent since the pandemic (comparing January-March 2023 to the January-March average across 2017-19);
- Listings for four-bedroom properties declined the most. Over the same period, listings of four-bedroom properties almost halved (46.6 per cent down);
- Across, one, two, three and four-bedroom properties the overall reduction is 41 per cent down on the 2017-19 average. This reduction in the availability of private rental accommodation is higher in London, compared to a fall of 33 per cent nationally;
- At the same time, asking rents are 20 per cent above their pre-Covid level in March 2020.
The researchers also investigated affordability for the 300,000 London households reliant on Local Housing Allowance to meet their housing costs. Eligible households receive LHA as part of their housing benefit or Universal Credit payment if they have a private landlord, and the government has frozen LHA rates since April 2020.
In the face of fast-rising rents, the decision to keep LHA rates frozen has significantly reduced the number of properties affordable in London under LHA. Only 2.3 per cent of London listings on Rightmove in 2022-23 were affordable to those using the benefit to pay their rent – falling from 18.9 per cent in 2020-21.
London Councils wants the government to raise LHA to cover at least 30 per cent of local market rents and boost investment in building more affordable homes.
A spokesperson for London Councils, Labour councillor Darren Rodwell, says: “This research is the latest evidence of how the capital’s broken housing market is worsening the unsustainable and increasingly unmanageable pressures we face in London.
“A bad situation is now becoming disastrous. We’re seeing fast-rising private rents and reduced availability of rental properties against a backdrop of continuing cost-of-living pressures and London’s longstanding shortage of affordable housing. Homelessness is a national emergency but with London accounting for two-thirds of England’s temporary accommodation placements we are at the epicentre of this crisis. Urgent action is needed from the government to help households avoid homelessness and to reduce the number in temporary accommodation.”
And Abigail Davies, a Savills director, adds: “London’s private rented sector, which provides homes for over one million households, is heavily reliant on private landlords. Many have high levels of borrowing who find themselves at the sharp end of the turmoil in the mortgage market.
“The triple whammy of rising costs of borrowing, greater exposure to tax, and regulatory changes means many are exiting the sector, putting downwards pressure on supply against ever-rising tenant demand. Further upwards pressure on rents seems an inevitable consequence. Without doubt, this will compound the problems faced by lower-income households and points to the need for policy that favours the delivery of affordable homes across the capital.”
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Hardly surprising with Mr Michael’s Gove’s stupid attack on Private Landlords.
Mr Gove comments in Landlords Today’s Article yesterday is laughable, where he tells us Landlords are vital to the Private Rented Sector
Stating the Obvious.
We are to Private Rented Sector and always have been, but now he wants to topple us for his Corporate Friends to take over and that’s what has been a leading factor in all the mayhem and Homelessness directly caused by him, one man destroyed thousands of lives with Rent Reform Private Property Confiscation Bill why is he still in Parliament he was previously sacked for back stabbing so to speak.
So this Article yesterday of the 5 drew an enormous reaction and comments.
3’533 read, at least 61 Commented all against The Housing Secretary as far as I can see, so he’s completely out of touch and has no Mandate to interfere and change PRS with no backing of 2’600’000 Private Landlords who Supply and own the Private Property.
Further to the 61 comments approx posted yesterday, attracted another 445 people given thumbs up agreeing with those comments when did that happen before ?.
2 Actually got 27 approvals well done Jo & Adrian.
By comparison another one of the 5 Articles yesterday’s about Analysis of Regions & Snapshots of the Private Rental Market got Zero Comments.
Mr Michael Gove you have a lot to answer for destroying people’s lives.
Meanwhile, Landbay’s quarterly survey of landlords shows that 41% are intending to buy more. Of those landlords who own 11-20 properties, 54% intend to buy more. I’m certainly in the buying category for the right opportunities. I wonder how this tallies with all the comments portraying doom and gloom. Is it possible that many of the portfolio/professional landlords are simply getting on with it and taking advantage of rapidly rising rental yields?
The Government should admit that their Renters Reform plans and legislation have been disastrous for both landlords and tenants, particularly in London where the return from letting can be smaller than putting the capital tied up in the houses into a good savings account.
You cannot decide to turn other peoples' investments into social housing. People will obviously resist that by selling up. The lack of foresight has been totally incredible.
More and more people will decide to sell as the general election approaches unless the Labour Party can reassure landlords that their housing policy will follow Welsh Labour party policies. It is vital that landlords have the right to end tenancies at some point without the need to provide a reason.
If Labour carries on espousing even more anti-landlord policies than the current government, then there is going to be a housing crisis on a huge scale.
I'm surprised asking rents are only 20 per cent above their pre-Covid level in March 2020.
That's well over 3 years ago. Inflation has been over 10% a year for a fair chunk of that period. Is a 20% rise even keeping pace with inflation or is it a price drop in real terms?
I think some rents have gone up by considerably more than 20% in London, Jo. You are right. However, my rents are still at pre-Covid level. I haven't put them up a penny.
Part of the reason that I haven't made any increase is that not so long ago there was no licensing, and that meant that three people could rent a two bedroom flat - for example a couple and a single person. Now you can only let to two people unless you go through all the licensing process.
Yes Ellie and we were allowed to have 4 persons in a 2 Bed Flat / 2 couples = 2 Households in the HMO (2 persons =one household).
Quite right, Michael. The additional licensing regulations have made renting much more expensive for tenants.
Seems Gormless Gove's Renters Reform Bill plus threats of worse to come from Labour's Lisa Nandy has destroyed more of London's rental market than the Luftwaffe managed to in the Blitz.
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