Decline in Private Rental Advertisements Spotted in London's Real Estate Market
The housing market in London is facing a significant challenge, with the number of affordable rental properties dwindling and fast-rising private rents exacerbating the situation.
Since the onset of the pandemic, the number of properties available for private rent in London has fallen by a staggering 41%. This decline is more pronounced in London compared to a national fall of 33%. Rental listings for one, two, three, and four-bedroom properties have all decreased by around 36%, with listings for four-bedroom properties experiencing the most significant drop at 46.6%.
One of the key factors contributing to this reduction in affordable properties is the government's decision to freeze Local Housing Allowance (LHA) rates since April 2020. This has made it increasingly difficult for many Londoners to find properties within their budget, as rental prices in London are currently 20% above their pre-Covid level in March 2020.
The buy-to-let market in London is also contracting, with realtors exiting the sector, further reducing the pool of available rental properties.
This housing crisis is not just affecting those looking for rental properties. Councils in the capital are collectively spending more than £52m each month on temporary accommodation, and London Councils and its partners are calling for urgent action from the government to help households avoid homelessness and reduce the number in temporary accommodation.
London Councils estimate that 166,000 Londoners are homeless and living in temporary accommodation arranged by their local borough. This figure is evidence of how the capital's broken housing market is worsening the unsustainable and increasingly unmanageable pressures in London.
Darren Rodwell, London Councils' executive member for housing, stated that the current housing market situation in London is worsening and is leading to unsustainable and increasingly unmanageable pressures. He urged ministers to raise LHA to cover at least 30% of local market rents to boost investment in building more affordable homes.
Research conducted by academic and applied research groups specializing in urban development and spatial transformation has highlighted the severity of the situation. While the specific organizations directly tasked with studying London's private residential market were not explicitly identified, it is common for universities, research institutes, and urban planning entities to be involved in such research to inform policy and development strategies.
The research found that only 2.3% of London rental listings on Rightmove in 2022-23 are affordable to those using LHA to pay rent, down from 18.9% in 2020-21. This statistic underscores the urgent need for action to address London's housing crisis.
As the capital faces the prospect of seeing its highest ever number of homeless households in temporary accommodation by the end of the summer, it is clear that the housing market in London is at a critical point. Homelessness is a national emergency, but London, accounting for two-thirds of England's temporary accommodation placements, is at the epicenter of this crisis. Urgent action is needed to alleviate the pressure and provide sustainable housing solutions for Londoners.
