5% of London rentals are affordable to low-income
Research undertaken by London Councils finds the capital’s private rented sector (PRS) has considerably shrunk in size.
The research found that up until April 2021 London’s PRS increased. However, this positive trend was brought to a grinding halt – from April 2021 to December 2023, 45,000 rental properties were sold in the capital without being replaced. This accounts for 4.3% of London’s private market.
Such findings, reinforce concerns that reduced availability of privately rented homes in the capital put’s those on a lower income at an increased risk of homelessness – an issue that has recently infected the area.
The analysis that was published today was undertaken by Savills and commissioned by London Councils and Trust for London.
News of the research has come after London Councils previously discovered a 41% reduction in the number of PRS properties advertised to let since the COVID-19 pandemic.
Key findings from the research include:
- The availability of listings affordable to households relying on LHA to cover their rent gradually reduced throughout 2023-24 for all property sizes.
- Landlords selling rental stock to owner occupiers has increased sharply. From April 2021 to December 2023 45,000 rental properties were sold without replacement.
- Properties are leaving the rental market at a much faster rate in the most affordable locations to rent. During 2023, PRS stock across the lower end of the market reduced by 3.3% per month as a proportion of available listings compared to 2.6% per month across the rest of London.
As a result of such stark findings, ahead of the Autumn Budget, London Councils is calling on the government to make the increase in LHA rates a permanent fixture. The cross-party group also wants rates to be updated annually to help track market rents.
Cllr Grace Williams, London Councils’ Executive Member for Housing & Regeneration, said: ‘These stark figures are the latest evidence of the massive pressures faced by low-income private renters in the capital.
‘London’s homelessness emergency is fundamentally driven by the chronic shortage of affordable housing. There are 2.7 million people relying on privately rented housing in the capital. The falling number of privately rented homes and worsening shortage of affordable accommodation are an urgent challenge for Londoners and London boroughs.
‘Further action at a national policy level can help us turn the situation around and we are committed to working closely with the government on this important agenda. Interventions such as increasing Local Housing Allowance rates to keep pace with rent rises would help prevent homelessness and save public money in the long run.’
Susie Dye, Trust for London’s Grants Manager, added: ‘It’s no surprise to renters that it’s desperately hard to find a home in London if you don’t have the money for a deposit and are on a low income.
‘Savills has now given us the best available evidence of this, and it points clearly to the way forward. The government is rightly working to protect renters through the Renters’ Rights Bill. But it urgently needs to act to make homes more affordable through ensuring Local Housing Allowance covers the actual costs of renting for those who need it, funding for local authorities to support those made homeless in the broken housing market, and ultimately with significant investment in building social housing.’
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