Over half London’s private renters are struggling. Renting needs fixing now.

When does a city’s housing problem get so bad that it’s legitimate to describe it as a ‘crisis’?

People often quibble about whether the current housing situation constitutes a ‘crisis’ or remains only ‘very serious’. But with more than half of London’s 2.7 million private renters now struggling to pay their rent at least some of the time, it’s beyond doubt that the city is in anything other than a full-blown crisis.

Doing something about this crisis will be one of the biggest tasks for the next Mayor of London – and the one that Londoners will judge the Mayor’s record on.

Our new report out today sets out the extent of London’s renting affordability crisis and the effect that it’s having on over a million Londoners. And it provides the roadmap the Mayor will need to get to grips with it.

Figure 1: Crisis point – more than half of London’s private renters struggle to pay the rent

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The effects of London’s affordability crisis
More than 400,000 Londoners constantly struggle to pay their rent or are falling behind. With so many pushed so hard by their housing costs the consequences are bound to be serious. The findings of our research paint a bleak picture of a city struggling to make ends meet.

affordability stats for blogRenting Londoners are being forced to cut back on essentials, including food and clothing. Many are unable to even think about saving for a deposit to buy a home of their own. One in three have had to go into debt to pay the rent in the last year.

And for the worst affected, not being able to pay the rent is leading directly to homelessness.

The impact on low income households and renters with children is worse. So it is not surprising that our research also found more than half London’s childless young couples were putting off having kids specifically because they were renting privately. Unaffordable renting is making London an extremely hard place to raise a family.

There are wider effects too, even for those who aren’t renting themselves.

London businesses cite housing costs as one of the principle barriers to recruiting and keeping junior staff. And others have warned that it is becoming increasingly difficult to hire public sector workers like teachers, nurses and firefighters: the very people who make the city work.

What the next Mayor should do about it

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There’s no quick and easy way to make renting in London affordable. It took years of neglect for things to get this bad, and solving it will take years of sustained action.

But there is a route to tackling the affordability crisis in London’s private rented sector.

1. Tackle the causes of the crisis by building the homes that London needs, including genuinely affordable homes

Underpinning London’s unaffordable private rents, is a chronic shortage of homes and particularly genuinely affordable homes. We need the next Mayor of London to use their powers to get London building at least 50,000 homes a year, prioritising new homes to rent that are affordable for Londoners on low and average incomes so they don’t need to put up with high private rents at all.

2. Provide support in the meantime by defending housing benefit for private renters

Housing benefit is a lifeline to many Londoners who are struggling with high private rents. For many, it’s the difference between them having a home or not, and it will continue to play a vital role over the years it will take to tackle the city’s shortage of homes. But in recent years housing benefit growth hasn’t kept up with rent inflation, putting a squeeze on household budgets.

Over the coming years low income renters are going face a four year complete freeze on Local Housing Allowance rates (that’s the housing benefit they can claim to pay private rents). The Mayor needs to champion the need for low paid Londoners to live in the city and should campaign to ensure that the housing benefit rates set by the government are sufficient to make this happen.

3. Stop London’s dysfunctional market making things worse for all renters by improving the rental market

While the shortage of homes underpins London’s affordability crisis, unstable rents, high moving costs and discrimination are making it worse. Moving costs alone add an average £1500 to the amount that London renters have to find every time they move home, which happens all too often.

The Mayor of London doesn’t currently have all the powers necessary to get to grips with the dysfunctions in the rental market, which are retained by the government. But the election of a new Mayor provides the perfect opportunity to campaign for the powers they need to improve affordability for London renters by:

  • Introducing longer tenancies with predictable rent increases and
  • Banning letting fees for private tenants

Without taking all three of these steps, the next Mayor will fall short.

All are needed to get to grips with the long term causes of London’s crisis and ensure that support is available in the interim.

They will be no mean feat to achieve, whoever becomes Mayor, but families across London will be depending on them to do so.

Click here to read our report on how to make renting more affordable for more Londoners in full.

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