London rents: affordability crisis looms as demand for rentals highest since 1999

According to SpareRoom, London tenants spend more on rent than any other UK city.
Renting in London: It is now less expensive to rent a flat in London than it was one year ago
London rents return to pre-Covid levels after workers return, according to Foxtons
London rents rise for the first time since the Covid pandemic, as tenants return to the capital’s centre.
The rule of thumb to be affordable has been that rent should not exceed 30% of your income. This definition was outdated before the pandemic, but it will be hard to find people’s financial situation in the months and years ahead. “With over 80 percent of the UK renting, and nearly a third of UK households spending more than half of their income on rent, people are already feeling squeezed,” Matt Hutchinson, SpareRoom director, says. Both domestic and international students returned home and young tenants were able to move back to their families. This caused rents to spiral and landlords converted their Airbnb properties into rentals. “Rents plunged 20% at this time,” says Tom Bill, Knight Frank’s head of residential research. They have since rebounded to match rising living costs. “Twelve Months ago was a great time to sign a rental agreement, but the reversal in rents has been severe. He explains that there was a strong downwards movement, then they rose steeply after London reopened. “There is a steady stream in students returning, as well as office workers and those who bought out of the M25 to enjoy the benefits of working from. They now realize that they need to be closer and are renting in the town. Anthony Codling, a property analyst warns that tenants will be forced to pay higher rents. “Unfortunately, rents are increasing like other living expenses. Rent demand is at its highest since 1999. Experts expect rents increase by around 4% this year. In addition, many landlords will be looking to raise rents in order to offset the expected rises in mortgage rates,” Codling, chief executive of Twindig, says. Codling says that the main effect will be to decrease disposable income. This will make it more difficult for first-time buyers to save enough money to buy a deposit. When we add in the end to the Help to Buy scheme, this means that rents will continue to rise.