Renting in London is no laughing matter in 2015 and if you’re a resident of the capital – or planning to be – in 2016 then we’re sad to say that it doesn’t look like things are going to get any easier. With rents permanently on the rise (by more than 11% this year according to some surveys), finding somewhere that you can afford to rent is only half the battle – keeping up with the rental payments, which for many of us take up at least half our salary, is becoming increasingly problematic. But how bad have things become and are we at the stage where state intervention is required?
Homes & Property Magazine recently featured the example of a London based tenant who had spent seven years renting in the capital – in zones 1,2 and 3 – who counted up the amount that she had spent in that time. And the results? Over seven years she had paid over more than £44,000 in rent. That figure may have made you exhale as, of course, that’s enough to get you well on the way to a decent deposit to buy somewhere and when you see all that expenditure in one single figure it is a pretty shocking amount. In the article the tenant in question made the point that her earnings had increased and so she was now able to afford higher rents but as rents in the capital have increased you get less for your money now and so the standards of the properties she is living in aren’t that much better than when she first started out. A depressing picture indeed.
Figures recently provided by the House of Commons revealed that rents are the highest ever in London – amounting to around £300 a week, which is about half of the average weekly salary. And that’s just for your rent alone, before you factor in monthly bills, such as gas and electricity, or the myriad of fees you can expect to pay for the pleasure of renting (contract renewal fees, inventory fees etc). The article also mentions other tenants who have spent a whopping £60,000 in the same period on rents and that for some people in London renting takes up so much of their salaries that they can barely make ends meet at the end of the month, let alone start saving for a deposit to buy somewhere. Tenants in the capital are between a rock and a hard place and some are suggesting that perhaps a rent cap is the only answer.
However, there are issues with rent caps too as cities such as Stockholm and New York have demonstrated that rent controls can also impact the housing market in the form of shortages. So what choices are there? Sensibly, at the very least something needs to be done to ensure rents can’t rise at a rate that is faster than inflation. But other than that there are few ideas out there. The National Housing Federation says a long-term plan is needed to end the housing crisis rather than “short-term, sticking plaster policies” and we’d be inclined to agree with them. Thinking caps on then.