London Evening Standard/London
The cost of renting in London has rocketed eight times faster than wages over the past year to an all-time high, new research revealed.
Landlords say there is still “red hot” demand for homes across the capital from couples and families who cannot afford to buy.
Some of the steepest rises have been seen in the “inner ring” of family-friendly neighbourhoods such as Fulham, Clapham, Balham and Shepherd’s Bush.
In March the average monthly rent in London stood at £1,106, a rise of 7.9% in a year and the highest level ever recorded, according to the latest Buy To Let Index from lettings agency network LSL Property Services.
The increase compares with shop price inflation of 2.8% and far outpaces the average rise in earnings, currently running at a meagre 1%. It means an average £81 a month more is being eaten up by rent in London at a time when salaries have barely moved.
The rise has hit thousands of young working Londoners — now forced to rent for far longer than they had planned because of the relentless surge in property prices and the scarcity of mortgages.
David Newnes, director of LSL Property Services which owns estate agents Reeds Rains and Your Move, said: “Rents in London are red-hot. And with only modest improvements in the UK’s housing supply, they will keep being forced upwards. Over the next few months it looks likely the spring bounce will continue.”
More than a quarter of Londoners now rent from private landlords, compared with 14% in 1991. But many say they are being priced out of the rental sector just as brutally as they have been excluded from home ownership.
Union organiser Nell Andrew, 30, earns almost £40,000 a year — but said she and her partner, an illustrator, still have a “student-level existence” after paying £1,300 a month for a two-bed apartment in Stamford Hill, Hackney.
They may now seek a bigger place to start a family out of London.
Andrew said: “People used to rent to save before buying — but this is impossible for us, even though I’m on a healthy wage.”
There are growing signs that tenants are struggling to pay the higher rents, which swallow an ever higher chunk of their pay. For every £1,000 owed to London landlords in rent last month, almost £100 was unpaid — twice the level of tenant arrears just four months previously.
Campbell Robb, chief executive of housing charity Shelter, said: “The relentless rise of rents is putting more pressure on Londoners already fighting to stay afloat.
“Our research shows that nearly two-thirds of Londoners are struggling or falling behind with their rent, leaving little left over for essentials — let alone to save for a home of their own.”
Deputy mayor for housing Richard Blakeway said there is no chance of reintroducing rent controls in London. But he insisted: “If people are paying more they should expect more.
“There’s a whole lot of things we are doing around a new private rental standard which will introduce greater transparency on the costs involved in renting, clearer expectations on when repairs should be done and clearer rental agreements.”