Data released by the English Housing Survey reveals that the number of people renting property in London has now risen to 30%, an increase of 1.9% in 12 months. These figures reflect the housing crisis facing Londoners, who are suffering from years of underinvestment in affordable housing. Young people, in particular, are finding it increasingly unaffordable to live in the capital. Many are being forced to move away from London, in a bid to find somewhere they can afford to rent.
The private rental sector has grown in recent years. The number of people living in rental accommodation has increased by 74% in the last decade. Renters pay, on average, 41% of their income on rent. This is far higher than homeowners, who typically pay 19% of their income on mortgage costs.
As many housing analysts point out, it is first time buyers who are the worst affected. People aged 45 and under are finding it very difficult to get on to the housing ladder, so they are forced to rent. The number of homeowners aged 45 and under has fallen by one million in the last seven years. Young people aged 25-34 are now the largest group in the private rental sector.
Changes to Buy to Let
“Due to the changes to the buy-to-let market, we believe the cost of renting is likely to increase,” says Charles McDowell from Aldermore, a leading mortgage provider.
Rents in London have certainly increased in the last few years. In fact, London is now the most expensive place to rent in the UK.