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.”
https://www.lettingagenttoday.co.uk/breaking-news/2023/7/bad-to-disastrous–sharp-fall-in-private-rental-listings?source=newsticker
