How will people afford rent increases in London?

[slapbangwallop]

Aware rent increases are effecting all areas of the UK, but will hit those areas where rents are already at their most unaffordable.

Dd is a grad living in London and shares a flat with her friend. Their rent has just gone up from £1,850 a month to £2,100 for a grotty two bed in Zone 3.

An old friend returned to renting after a divorce and had been living in a one bed fairly centrally that has gone up by £800 a month over the 8 years she lived there. She’s a teacher at the local state comp. She was saying that her salary had only gone up £100 a month over the same period. Her take home is roughly £2,500. When the rent was £1,100 a month and she earned £2,400 she was willing to make the sacrifice to live alone and near work. Now the rent is £1,900 a month and her salary is £2,500, she can’t make it work.

I think this is a lot of people. London is now very dull in the centre and the other parts are just occupied by people who work in finance kidding themselves they are interesting.

That's what people who can't afford to live in London keep telling themselves, yes.

The creative field always was and always will be a field filled with people who rely on their rich parents to fund their lifestyle.

I do live in London; but I notice a lot of suspiciously cheap housing with high specs being available. I accept cheap is relative in London but I think a lot of people have overextended themselves financially with their mortgages. If you have a rising income it is a good time to buy. For everyone else it is looking dire.

most people house share, with a few people then move out to commute in or buy. Crazy rents in London/City centre isn’t new, I was earning a decent wage and couldn’t afford/justify renting on my own, so moved to a beautiful town with direct train to London

It’s far worse than it has been though.

I mean - I was able to rent a room 12 years ago for £420 a month. I was on a low wage, my take home was about £1,750 a month in my first job.

The equivalent job is now paying £2,000 after tax, but the same room is £1,000.

It’s completely unsustainable.

My rent has gone from 1600 to just under 2000 in the last 3 years. It's still under average for my building.
I'm lucky I'm in a well paid job and moved to a higher paying contract last year.

I'll do contemplate moving further out but the savings are not significant enough to deal with longer commute and increased travel costs and higher council tax.

I have done the maths on this multiple times over the last decade and the time / money means it doesn’t really add much value moving ‘further out’.

I think for most people it’s ’leave London entirely’ now.

Recently had this argument with an estate agent when they told me to consider Kent I looked at the rail fares and it just didn't add up...

I agree with this.

It’s easier if you are in a couple to make ends meet in London. I taught in London for ten years and lived in a houseshare. I eventually had to move back to my home town as I was single and wanted to buy my own property which I did in my mid-30s. I had teacher friends who managed to buy small flats in social housing tower blocks but that might be out of reach these days.

No, it doesn’t. The trains are expensive (and - unreliable!).

If you actually want to live close enough to a train station so you don’t need a car (another huge cost, parking etc) - then the properties tend to be a lot more expensive too.

One of the problems with such high housing costs is that it eats into more and more of your income... therefore people have far less disposable income and other businesses lose out. Beauty salons, hairdressers, shops, the hospitality industry. It's really bad for the economy

Yes, exactly. This is why we have a recession, increasing unemployment and business insolvencies. The economic situation isn't going to improve any time soon!

This is something that my nail technician is struggling with. I choose one thing to spend a lot of money on and I spend money on my nails and she said a lot of people are going through cheaper services with her because they just can't afford the more expensive services.

Something has to change in the UK with housing.

Like Rishi Sunak today on about the crackdown on sickness when I have been sexually assaulted in my flat I've had to take a month off work. Would he propose me not taking time off work and being unproductive at work? I wonder how many people are sat waiting on NHS waiting for mental health support and it's because of poor housing conditions.

This.

LL’s are having to increase rents to cover their mortgages and increasing interest rates. Generally people can’t afford to rent out houses and make no money from it/be in deficit. There’s also the problem of many LL’s selling up as it isn’t profitable any more and there are so many rules & regs and hoops to jump through it’s not worth it. A lot are getting out before Labour get in and make getting rid of problem tenants even more difficult. Due to all these issues plus a significant increase in population and nowhere near enough council properties being built there are now not enough rentals to go around, forcing prices up even higher.

If you owned a rental property and the mortgage was £1000 a month but you could realistically get £2000 rent pcm for it what would you do? Or if you’re tenants pay £1000pcm but your mortgage and expenses are costing you £1500pcm? Would you increase the rent to a figure you knew you could achieve or cover the shortfall out of your own pocket? Contrary to popular belief most LL’s are not rolling in it - they are running a business and need an income like any other person.

I'm not in London but around me all the flats and cheaper houses have suddenly come onto the market, presumably ex rentals. A lot of have a go landlords are being priced out now.

@theworldie i have also heard that not only is it that mortgage costs have increased dramatically - but also the increase in service charges etc.

Often the service charge on these flats has increased drastically since purchase - another cost they can’t absorb.

Unfortunately, it is tenants who are the victims of LLs who do not know how to run their business, some of whom foolishly assumed that rates would never rise. The landlords had a choice about whether or not to get involved in BTL. The tenants need a home. Yes, the majority of the blame for the awful state of the housing market lies with governments of the past 40+ years but don't pretend that LLs are the victims here.

Ultimately, living in London is a choice. I work in the public sector and more of my colleagues live either in the very outer zones or the home counties, than actually live inside London. Even my head of department who I think is on around 70k lives outside London. And these are people who bought their houses 20 years or so ago, so clearly even then it wasn't affordable to live in the centre.

Working in London means either a long commute or high housing costs. Better to educate your DC to look at other options. So they either go for a career making big bucks or they look at other areas in the country. My DD is at uni now and wants to go down the route of buying her own place at some point. And we've already discussed that will mean her not living in London.

This isn't unique to us. I've seen discussions on here about high housing costs in major Australian and Canadian cities for example. It's the way it is now.

Bristol is the second most expensive place to rent and you don't get the equivalent of a London weighting. As a result DS lives at home again and as we're looking to sell our house we've considered buying one big enough for DD and her family to move in as well.

I rented in London in 00s & 10s. Renting shared homes when was in my 20s and then living with my partner in his property he owned in my 30s. Simply put to rent as a single person in London Zone 1-4 will cost min rent £1800 + for a 1 bed flat. And then bills. 5 years ago I made change to switch careers and have been fortunate to go from 40/45k per year to 75k + a year in that time. I left my partner, work in London, live in Brighton, wfh 3 days a week. I own land overseas but rent here. It is not possible really to live a good life in London without sharing your living costs with someone else and earning a fairly high wage. I love London and grew up there but the quality of life in last decade had nosedived - transport can take an hour to get from one side of London to centre or south to north, it’s 20 mins extra to live by the sea where I am now, albeit extra $ . Things are changing but I don’t see changes happening in salaries vs rent to balance out cost of living issues for around 5-10 years.

As a public sector worker with 3 adult DC all still at home I agree. They can’t afford to move out. We are FROM this area. We all work. The flats in my area are being actively marketed in Beijing and Hong Kong! My DC on ordinary salaries have no chance.

I do recruitment for the Civil Service. For the big national campaigns with a choice of various locations there are very few that put London as first choice now. Manchester is the most popular. In the last campaign last year the London offices didn’t fill their vacancies so the teams in the North were expanded instead.

Comparative bargains can still be found in London.

I have a friend living alone in a 1.5/2 bed flat in zone 4. The flat is easily 60 sqm with an enormous lounge and kitchen.

He’s paying £1450pm and that’s having just signed a new contract.

It’s a few minutes from a central line station & a deli serving good coffee & freshly made sourdough etc. As well as woodland walks on his doorstep.

He earns a high salary though, and for many the issue is more about having to compete with other prospective tenants.

Closer in, you can always find cheapish flats in the grottier parts of Lewisham. Though it’ll take you an hour to get anywhere…