London’s rental crisis, what is causing it and what the future holds

The reality for those looking to rent a home in London has long been challenging but there's no doubt the situation has now become pretty desperate, with a load of issues such as high demand and unaffordable rents etc.

So let's take a look under the hood so to speak and try and find out what is causing the rent crisis, and most importantly is it going to end any time soon?

One of the main reasons the rental market is in the current mess is due to the high demand for properties, and the shrinking supply of them. Because the demand is obviously far surpassing the available supply, there's just not enough available homes to go round.

Things are so bad there are reports of potential renters are having to agree to a place without even seeing it in person, but it gets worse, some are getting in to bidding wars with rival renters and paying for many months in advance. Not a normal state of affairs by any stretch.

Higher Costs & Rising Rents

The recent rise in interest rates has come as a shock and put more pressure on landlords. Many are finding the buy-to-let business model only really works when interest rates are very low. Banks are now much less likely to lend which is further fuelling the shortage of available properties.

Landlords and letting agents often have the upper hand in setting rents, which has resulted in an increasing number of people either being priced out of the market or spending a significant portion of their income on rent, leaving them with little left for other essential expenses.

As rents have become unaffordable in central London, many renters are moving further out in search of cheaper properties. This has led to a rise in demand for rental properties on the outskirts of London, which has pushed up rents in those areas as well.

This has also resulted in longer commutes and increased travel costs, causing additional challenges for renters who are already on the breadline as it is.

Impact on Movers

Another significant consequence of the rental crisis with reduced mobility among renters is the impact it is having on some moving companies within our industry.

With limited affordable rental options available, many renters are finding themselves either stuck in what may be unsuitable accommodation or are just deciding to stay where they are if possible. In addition, the general slowdown or in some places reversal of the housing market is further aggravating the situation.

As a result there are simply less people moving home in London and a relative drop in overall activity. It remains to be seen whether activity levels will pick up again during the summer months, which is traditionally the busiest time for Movers and for people to move house.

So what's going to happen?

With inflation raging and the cost of just about everything going up, it's no surprise that many are now unable transition from renting a property to owning one, which means even more people than usual needing a rental home.

Without wanting to sound like a merchant of doom, it's difficult to see at this point how rents are going to fall anytime soon. Nothing lasts forever though and we remain optimistic that this crises will pass (at some point). 

Who knows what's going to happen, but like any big city London needs to keep moving (literally) otherwise it stagnates and declines. It's crucial that solutions are found to ensure that renting remains a viable and accessible option for those living in London.