Almost half of Londoners now rent rather than owning property, new research shows
The dynamics of London's property rental market are experiencing a major sea change with almost half of Londoners now in rental properties, a new report shows.
The research undertaken for property consultants Cluttons also shows that home ownership and social renting are in decline while 36% of Londoners aged 20 to 40 years are the prime demanders of rental property.
The figures show the depth of the change. Almost 50% of London's population now rents their property compared to a national average of 30%, according to the independent research paper written by Professor Michael Ball of the University of Reading.
The report, One size does not fit all: diverse opportunities in London's rental market, shows that in volume terms, there has been an 80% increase in the number of private tenancies over the last decade, with most of the increase occurring since 2005.
Renting in London is almost equally divided between the private and social sectors, with a quarter of households renting privately and 24% paying below market rents to social housing institutions.
In contrast, the number of people who own their own homes or rent from a local authority or housing association has stagnated or declined.
London has a relatively high proportion of people aged between 20 and 40, some 36% of the population, a group, which the report suggests, is the prime demander of rental accommodation.
Inward migration to London, a reduction in the average household size and the obvious cost barrier to owning a home are also significant drivers for change in the dynamic.
‘This report highlights that younger people are choosing to rent for longer periods, especially if they plan to stay in the city only for a few years, or wish to live centrally, thus avoiding long commutes from outside London. Given the high cost of getting that first foot on the property ladder, many of them are unsurprisingly unable to commit to buying and are forced into renting,’ said Sue Foxley, head of research at Cluttons.
‘The idea of renting long term is now seemingly universally accepted, partially due to a sea change in attitudes. We are seeing a rise in the number of relatively affluent parents who are happy to bring up children in rented homes delaying a move into owner occupation, something that was uncommon until recent times,’ she explained.
‘There is a growing differentiation between those that put a high value on proximity and amenities when choosing where to live and those that react to rising housing costs with soul searching over lifestyles that are prepared to compromise on accommodation in order to keep living costs down,’ she added.
The report also shows that London has a greater concentration of higher education institutions, international students and a lower provision of university accommodation in comparison to the rest of the UK, all of which have contributed to the increase in rental demand.