Almost half of London’s population now rents their property compared to a national average of 30%, according to a new independent research paper written by Professor Michael Ball, University of Reading, for property consultants Cluttons.
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 at 36%, aged between 20 and 40, a group, which the report suggests, is the prime demander of rental accommodation. Inward migration to the capital, 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.
Sue Foxley, head of research at Cluttons said: “This report highlights that younger people are choosing to rent for longer periods, especially if they plan to stay in the capital 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.
“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.
“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.”
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