New analysis reveals a 41% discount within the variety of London properties obtainable for personal lease because the Covid-19 pandemic, amid warnings that turbulence and provide constraints within the non-public rental market is worsening near-record ranges of homelessness throughout the capital.
The evaluation – which represents probably the most complete research but revealed of London’s non-public rental market and its relationship to homelessness pressures – was undertaken collectively by the LSE and Savills and commissioned by a partnership led by the cross-party group London Councils.
London’s buy-to-let market is contracting as landlords exit the sector which, coupled with the freeze to the Native Housing Allowance (LHA) and skyrocketing rents, is compounding the challenges confronted by low-income households searching for reasonably priced lodging and by London boroughs working to forestall homelessness.
London Councils and the report’s co-funders – Belief for London, Capital Letters, and the London Housing Administrators’ Group – say the analysis is the newest proof of London’s damaged housing market and the necessity for pressing authorities motion to deal with rising homelessness.
London Councils estimates that 166,000 Londoners are homeless and dwelling in non permanent lodging organized by their native borough. This determine is equal to your complete inhabitants of some London boroughs – or to the whole variety of residents of a metropolis the dimensions of Blackburn or Oxford.
On present traits, London will see its highest ever variety of homeless households in non permanent lodging by the top of the summer time. With boroughs within the capital collectively spending greater than £52m every month on non permanent lodging and appropriate lodging for homeless households more and more scarce, London Councils has branded the scenario “unmanageable”.
Key findings from the LSE and Savills analysis embrace:
- Rental listings have fallen throughout London, with the variety of one, two, and three-bedroom properties listed for lease in each interior and outer London down by round 36% because the pandemic (evaluating January-March 2023 to the January-March common throughout 2017-19).
- Listings for four-bedroom properties declined probably the most. Over the identical interval, listings of four-bedroom properties virtually halved (46.6%).
- Throughout, one, two, three and four-bedroom properties the general discount is 41% down on the 2017-19 common. This discount within the availability of personal rental lodging is increased in London, in comparison with a fall of 33% nationally.
- On the identical time, rental costs listed by London landlords (the ‘asking rents’) are 20% above their pre-Covid stage in March 2020.
- The buy-to-let market is contracting nationally and extra non-public landlords in London are lowering quite than rising their portfolios. The variety of rental properties being marketed on the market has greater than doubled because the pandemic, and the proportion is rising. This has a transparent impression on low-income households seeking to lease, and on boroughs searching for non permanent lodging for homeless residents.
The researchers additionally investigated affordability for the 300,000 London households reliant on Native Housing Allowance (LHA) to fulfill their housing prices. Eligible households obtain LHA as a part of their housing profit or Common Credit score cost if they’ve a personal landlord, and the federal government has frozen LHA charges since April 2020.
Within the face of fast-rising rents, the choice to maintain LHA charges frozen has considerably diminished the variety of properties reasonably priced in London beneath LHA. Between January and March this 12 months, solely 2.3% of London listings on Rightmove in 2022-23 have been reasonably priced to these utilizing the profit to pay their lease – falling from 18.9% in 2020-21.
The Renters Reform Invoice presently making its means by way of Parliament is predicted to deliver some constructive modifications to the non-public rented sector, together with by way of banning Part 21 (‘no fault’) evictions of tenants.
Nevertheless, London Councils and its companions are calling on ministers to take additional measures to assist low-income renters meet their housing prices and deal with homelessness pressures, together with by way of elevating LHA to cowl at the least 30% of native market rents and boosting funding in constructing extra reasonably priced properties.
Cllr Darren Rodwell, London Councils’ Govt Member for Regeneration, Housing & Planning, mentioned: This analysis is the newest proof of how the capital’s damaged housing market is worsening the unsustainable and more and more unmanageable pressures we face in London.
“A foul scenario is now changing into disastrous. We’re seeing fast-rising non-public rents and diminished availability of rental properties in opposition to a backdrop of constant cost-of-living pressures and London’s longstanding scarcity of reasonably priced housing. Homelessness is a nationwide emergency however with London accounting for two-thirds of England’s non permanent lodging placements we’re on the epicentre of this disaster. Pressing motion is required from the federal government to assist households keep away from homelessness and to scale back the quantity in non permanent lodging.”
Abigail Davies, Director, Savills, mentioned: “London’s non-public rented sector, which supplies properties for over a million households, is closely reliant on non-public landlords. Many have excessive ranges of borrowing who discover themselves on the sharp finish of the turmoil within the mortgage market.
“The triple whammy of rising prices of borrowing, higher publicity to tax, and regulatory modifications means many are exiting the sector, placing downwards stress on provide in opposition to ever-rising tenant demand. Additional upwards stress on rents appears an inevitable consequence. Doubtless, this may compound the issues confronted by lower-income households and factors to the necessity for coverage that favours the supply of reasonably priced properties throughout the capital.”
Susie Dye, Grant Supervisor at Belief for London, mentioned: “It’s unacceptable that in a world metropolis like London, 166,000 individuals are homeless and counting on over-crowded, costly ‘non permanent’ lodging. This radically imperfect system was a home of playing cards which relied on landlords of all stripes to prop it up. And now it’s collapsing.
“This report reveals why. The federal government has pursued piecemeal insurance policies on advantages, tax, and inflating property demand in addition to sporadic consideration to property requirements and renters’ rights. And now landlords on the decrease finish of the market are going elsewhere. These in energy in Westminster urgently want to assist low-income renters and be sure that in each the short-term and long-term, London has properties folks can afford.”
Sue Edmonds, Chief Govt of Capital Letters, mentioned: “This analysis makes stark studying, and it’s additional proof that our homelessness system is breaking down. That is the worst it has been for 30 years.
“The principle problem is provide – there merely aren’t sufficient properties, and the contraction of the non-public rented sector, alongside escalating rents, is a extreme blow to those that depend on it. There are 301,000 folks on ready lists for social housing in London alone, at a time when new developments have additionally slowed down.
“What we want now’s a joined up, holistic strategy, encompassing authorities coverage, native authorities motion, and third-sector help to keep away from continued unintended penalties with the resultant impression on the well-being and life alternatives of these affected. That is turning into greater than an emergency, this can be a disaster of generational proportions, and it requires rapid motion.”