New research on private sector rent levels shows that, at the current rate of rent inflation, average London rents will be £1,625 a month by April 2016. The average figures for all dwellings in Islington will be £1,815.29 per month, in Hackney will be £1,688.89 and in Waltham Forest will be £1,079.76. The forecasts, compiled by Tom Copley AM, are based on an average of rent rises between October 2011 and October 2013 as recorded by the Valuation Office Agency. For outer London average rents will rise to £1,350, and for inner London average rents will rise to £1,805.
The analysis shows that, should the current level of rent inflation continue, high rents will become a significant problem in outer-London, where rents have tended to be lower than inner London (see map below). London rents are forecast to rise at five times the England average.
I’m backing calls for the Mayor to launch an investigation into unsustainable rent increases and establish proposals for a mechanism to stabilise rents in London. The current rate of rent inflation is sucking demand out of the economy, and making London ever more unaffordable for people who work in the capital, which could impact on London’s economic growth.
These figures are a shocking indication of what residents in Hackney, Islington and Waltham Forest and across our city can expect to pay in rent by the end of Boris Johnson’s mayoralty. The current rate of rent inflation is making London unaffordable for people who live here, even those on ‘good’ salaries. With home-ownership an ever distant dream for many, it is time Boris Johnson used his position and launched an investigation into unsustainable rent rises and possible mechanisms for tackling them. Otherwise, we will see a devastating hollowing out of our great city, which will simply end up becoming the playground of the rich.
Britain has one of the least-regulated private rented markets in Europe. When more and more people have no choice but to rent we have to ensure that renting is a stable option, particularly for the growing number of families who live in rented accommodation. There are good landlords who do right by their tenants, but there are an increasing number who do not. So far the Mayor has only adopted trivial voluntary schemes to improve standards, it is time he treated this issue with the seriousness it deserves. There are over 800,000 private rented households in London. If he doesn’t act these people will continue to be squeezed, quality of life will decline and London’s economy will be held back.
It is even more pressing given the Mayor’s recent actions to redefine the criteria for affordable housing, which now sits at up to 80% of the market value. If Boris thinks that £1,452.23 per month, £1,351.11 per month and £863.80 per month (i.e. 80% of the predicted average market value come 2016) – for Islington, Hackney and Waltham Forest, respectively – is ‘affordable’, then he really is out of touch with the reality that millions of Londoners live every day. And, when we look at the Mayor’s decision to call in the Mount Pleasant planning application in Islington, which has a pitiful 12% of the proposed housing units classified as affordable, it’s clear that something needs to be done immediately to investigate what can be done to stop the renting crisis we face across London.
Projected private rent increases in April 2016, (darker shade of red indicates higher increase):