London’s private tenants are facing “increasingly unaffordable” rents, the homeless charity Shelter has warned, as high demand and a property shortage in the capital have led to stiff competition to secure housing.
The shortage has led landlords to demand that potential tenants compete in the bidding process Propertieswhile others were required to pay rent up to 12 months in advance, according to Ruth Ehrlich, director of shelter policy.
Ehrlich told the Financial Times Money Clinic Podcast. “And when they do that, they have to jump through very severe hurdles just to get to that house.“
Research from real estate website Zoopla found that rents increased by about 20 percent indoors London in the first quarter of 2022 and by 10 per cent outside London. That compares with growth of about 2 percent in the first quarter of 2019.
But agents said that in many cases higher rent increases are being paid. said Greg Tsoman, Director of Rentals at Martin Gerrard Estate Agents in North London and President-elect of the Trade Authority.
“I have never seen anything like this in my 20 years in this field,” he added.
The supply of private rental housing fell sharply in London to its lowest level in five years after investors who bought in to let them sell or reduce their exposure during the coronavirus pandemic.
On average, rental agencies have had 11.8 homes for rent in the capital in the year so far, compared to 21.8 in the five years to 2021, a 48 percent drop, according to Zoopla.
“There has been a lot of focus on the sales market, but in reality there is more supply pressure in the rental market and it is worse in London,” said Richard Donnell, director of research at Zoopla.
Will, the 28-year-old tenant in east London, who did not want his full name to be used, said he was trying to find a new place to live after being forced out of his previous flat earlier this year when the rent was paid. It was “really hard work”.
One agent asked how much he was willing to put up on a property to rent, warning him that others were offering £300 on the asking price. He said he went to seven viewings last week, adding that about half of the properties he’s seen listed online had been cut down by the time he responded. “I ordered a property that I saw listed on the same day, and the real estate agent said ‘I have already set aside 30 sites to offer.
Some potential tenants said they were being charged simply for showing properties. Daniel, 25, who also did not want his surname used, said he had been asked to pay a £600 deposit to offer a three-bed house in the London Fields area, the equivalent of one week’s rent.
Tsuman said the lack of housing construction and selling of landlords — initially due to the introduction of additional stamp duties in 2016 and then to take advantage of rising home prices during the pandemic — meant that demand was far outstripping supply.
“In May 2020, we had nearly five people vying for each property . . . in May of this year, that number jumped to 35 people.