80% of London’s tenants struggling with their rent due to cost of living crisis

A new poll undertaken on behalf of housing charity, Dolphin Living, has found that an overwhelming 80% of London’s renters are now struggling to afford to pay their rent due to inflation, with a quarter saying current payments are unmanageable.

Related topics:  Landlords,  rent,  PRS,  Rental market,  cost of living
Property | Reporter
25th January 2023
london smog
"Undeniably the most unrelenting pressure in London comes from rent, something that can be practically addressed through the provision of affordable housing."

The impact of this is even more acute on those critical workers who kept London functioning during the pandemic, given that 76% of them stated that rental prices were the most important factor to them when looking for a place to live, and 62% could not afford an increase in rents of 7% or more. There is growing concern that increases in market rental costs will cause an exodus of the city’s critical workers putting a strain on the city’s essential services.

As a response, Dolphin Living is now calling on the government to intervene urgently and to fund the rapid expansion of an intermediate housing programme designed to deliver more affordable rented accommodation available at a discount to market rent to those on modest incomes, including many critical workers.

The poll of 1,000 renters in London also confirmed what many have long suspected - rising market rental prices, combined with a decline across the capital in the number of homes to rent, is leaving private renters in a housing crisis. This can be seen by the 26% of respondents who said they could not afford their rent if it increased by 3%, with 37% stating that they would not be able to afford their rent if it increased by 5%, and well over half if it increased by 7%, all increases which are below the current rate of inflation.

In an attempt to counter the impacts of this, 36% of London’s renters have taken on extra work to pay their bills, with 36% cutting back on essentials, 59% cutting back on luxuries and a quarter are selling items to pay their rent. The poll undertaken by Opinium follows research by Rightmove which highlighted that average rents in London have risen to £2,343 per month, leading to the biggest-ever annual jump of 16.1%.

Despite market rent now being essentially unaffordable for a large proportion of London’s renters, the research also revealed a lack of awareness about the affordable housing options that are available to people on modest incomes in London. Only 21% of respondents were aware of intermediate housing for rent, but once the concept was explained, 41% were interested, reflecting the clear demand from the people who risk being priced out of the private market in locations allowing a reasonable commute to work.

According to the polling, the location of the home is paramount, and London is competing with other UK cities which are able to offer more favourable commute times. Overwhelmingly, respondents agreed that a commute of up to 60 minutes was reasonable. 77% said they would be willing to make sacrifices to make their commute shorter with 22% willing to live in a smaller home and a slightly smaller proportion (18%) willing to live in a less desirable area.

For critical workers, the need for housing near their place of work is even more acute, with 24% saying they would downsize and the same number saying they would live in a less desirable area. With many critical workers unable to work from home, this is no surprise.

Providing critical workers with homes they can afford near their places of work also ensures essential services can be delivered, including during times such as the recent lockdowns, while ensuring those workers have a safe, reliable and reasonable commute.

Olivia Harris, Chief Executive of Dolphin Living, said: “In the coming months, our nation is faced with a number of challenges, including Increased energy bills and high inflation, which will add to the mounting financial strain felt by many households. Undeniably the most unrelenting pressure in London comes from rent, something that can be practically addressed through the provision of affordable housing. The findings of our polling are clear and stark - that 80% of London’s renters are struggling to pay their rent, and a quarter can no longer manage to do so.

“We need policymakers to step up and address an issue that is affecting many of us, particularly London’s critical workers who are disproportionally affected by rising housing costs. These workers went above and beyond to help us survive the pandemic and now it is our turn to support them by building more affordable rental homes in the city.

“Intermediate rental housing could play a crucial role in the stemming of the crisis. It offers an alternative rental choice for households with a modest income, providing secure, affordable, good quality and well-managed homes at below market rent.”

“We hope the government realises that the delivery of discounted rental housing in high-value areas needs to be prioritised through an investment package to either build new supply or convert existing stock to homes for Londoners.”

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