London risks becoming ‘ageing city' as Labour hammers landlords
London risks becoming an 'ageing city' as Labour hammers landlords with red tape, experts have warned.
Average private rents in London jumped by 9.1pc to £2,243 per month in April, according to the latest figures from the Office for National Statistics (ONS). The typical house price in the capital stands at £556,000, according to the latest UK House Price Index.
Rents have been surging since the pandemic, with a tax raid on landlords and Angela Rayner's looming Renters' Rights Bill fuelling the problem. Labour's legislation is set to ban 'no fault' evictions and will make it harder to raise rents, prompting many landlords to sell-up.
A slump in the supply of rental properties is fuelling surging rents and experts warned that high housing costs could push young people out of London, potentially undermining the capital's economy.
'You could have a situation with London where it becomes an aging city, and the average homeowner age in London keeps going up,' said Stacy Eden of RSM.
'What we're seeing in London, compared with the other great cities we have - the university towns, Manchester, Liverpool - is a professional population that is declining.'
Mr Eden says more people in their 30s and 40s are moving out of London, partly driven by its high house prices.
He said: 'It's been difficult for first-time buyers to afford a mortgage, so they're turned to the rental market. That demand has increased, from young professionals who don't want to move out of London but can't buy.
'If you're stuck in between those two stalls, you might start to think about the third option, which is moving out of London. And people are doing that.'
London has traditionally been one of the youngest cities in the country as many young people move to the capital to start their careers. The average age of residents in London was 35 in the last census in 2021, compared to 40 across England as a whole.
A steady stream of workers has helped power London's economy, which is much more productive than the rest of the economy.
However, the rapid rise in housing costs since the pandemic threatens to bring London in line with the rest of the country and could undermine its economic dynamism.
Tom Bill of Knight Frank agreed that if rents continue to increase, 'you may find that the demand shifts outside the M25 a little bit more'.
Mr Bill said: 'Where people once might've considered renting rather than buying somewhere, as a plan 'B' - if plan 'B' is no longer necessarily on the table for so many people, then they'll increasingly look at plan 'C', which is Bristol or Manchester.'
Angharad Trueman, president of ARLA Propertymark, which represents property agents, said: 'More and more tenants can't meet the affordability needed for these rental properties. It's getting to a point where every single month, significant new lets fall through because of affordability and bad credit issues.
'It's simple supply and demand. Rents are going up because we're seeing a reduction in landlord numbers. To fix this and stabilise rent for tenants, we need to fix the supply issue.
'We've got renters' rights reform looming, changes to EPCs, tax changes ... It's all adding up to a picture that's making being a landlord more complicated and less profitable.
'Rents will continue to go up as more landlords leave. Until something's done to incentivise landlords to keep tenants for the long term and keep their rental properties, this is going to continue to happen.'
Meera Chindooroy of the National Residential Landlords Association said: 'Rents across the capital are high because there are not enough homes to meet demand.
'The only way to address this is to develop pro-growth policies… If changes are not made, many more landlords will simply exit the sector, leaving tenants with even less choice about where to live.'
A spokesperson for the Ministry for Housing, Communities and Local Government said: 'We have inherited a serious housing crisis which has made the dream of homeownership feel like a distant reality for a generation of young people.
'Good landlords have nothing to fear from our Renters' Rights Bill that will level the playing field between landlords and private tenants by providing the latter with greater security by banning Section 21 'no fault' evictions, empowering tenants to challenge unreasonable rent hikes, and banning unfair bidding wars.'
unfair bidding wars.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Leader Live
40 minutes ago
- Leader Live
Reeves to say spending review will reflect ‘priorities of working people'
The Chancellor is expected to focus on 'Britain's renewal' as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools. Arguing that the Government is 'renewing Britain', she will acknowledge that 'too many people in too many parts of the country are yet to feel it'. She will say: 'This Government's task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, their jobs, their communities.' Among the main announcements is expected to be a £30 billion increase in NHS funding, a rise of around 2.8% in real terms, along with an extra £4.5 billion for schools and a rise in defence spending to 2.5% of GDP. But Wednesday could present a tough prospect for other government as the Chancellor seeks to balance Labour's commitments on spending with her fiscal rules. The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn. This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement. The Chancellor has already insisted that her fiscal rules remain in place, along with Labour's manifesto commitment not to increase income tax, national insurance or VAT. She will say on Wednesday: 'I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal. 'These are my choices. These are this Government's choices. These are the British people's choices.' Other announcements expected on Wednesday include £39 billion for social and affordable housing over the next decade as the Government aims to meet its target of building 1.5 million new homes by the next election. The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026. The additional spending has been welcomed by homelessness charities, with Crisis calling it 'a determined political signal that housing really matters' and Shelter describing the move as 'a watershed moment in tackling the housing emergency'. The Chancellor has also already announced some £15.6 billion of spending on public transport in England's city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. There is also expected to be an extension of the £3 bus fare cap until March 2027 and an extra £445 million for upgrading Welsh railways. But one of the big losers from the spending review could be London, which is not expected to receive funding for any significant infrastructure projects or powers to introduce a tourist levy – both key requests from Mayor Sir Sadiq Khan.
North Wales Chronicle
40 minutes ago
- North Wales Chronicle
Reeves to say spending review will reflect ‘priorities of working people'
The Chancellor is expected to focus on 'Britain's renewal' as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools. Arguing that the Government is 'renewing Britain', she will acknowledge that 'too many people in too many parts of the country are yet to feel it'. She will say: 'This Government's task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, their jobs, their communities.' Among the main announcements is expected to be a £30 billion increase in NHS funding, a rise of around 2.8% in real terms, along with an extra £4.5 billion for schools and a rise in defence spending to 2.5% of GDP. But Wednesday could present a tough prospect for other government as the Chancellor seeks to balance Labour's commitments on spending with her fiscal rules. The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn. This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement. The Chancellor has already insisted that her fiscal rules remain in place, along with Labour's manifesto commitment not to increase income tax, national insurance or VAT. She will say on Wednesday: 'I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal. 'These are my choices. These are this Government's choices. These are the British people's choices.' Other announcements expected on Wednesday include £39 billion for social and affordable housing over the next decade as the Government aims to meet its target of building 1.5 million new homes by the next election. The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026. The additional spending has been welcomed by homelessness charities, with Crisis calling it 'a determined political signal that housing really matters' and Shelter describing the move as 'a watershed moment in tackling the housing emergency'. The Chancellor has also already announced some £15.6 billion of spending on public transport in England's city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. There is also expected to be an extension of the £3 bus fare cap until March 2027 and an extra £445 million for upgrading Welsh railways. But one of the big losers from the spending review could be London, which is not expected to receive funding for any significant infrastructure projects or powers to introduce a tourist levy – both key requests from Mayor Sir Sadiq Khan.
South Wales Guardian
an hour ago
- South Wales Guardian
Reeves to say spending review will reflect ‘priorities of working people'
The Chancellor is expected to focus on 'Britain's renewal' as she sets out her spending plans for the coming years, with big increases for the NHS, defence and schools. Arguing that the Government is 'renewing Britain', she will acknowledge that 'too many people in too many parts of the country are yet to feel it'. She will say: 'This Government's task – my task – and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, their jobs, their communities.' Among the main announcements is expected to be a £30 billion increase in NHS funding, a rise of around 2.8% in real terms, along with an extra £4.5 billion for schools and a rise in defence spending to 2.5% of GDP. But Wednesday could present a tough prospect for other government as the Chancellor seeks to balance Labour's commitments on spending with her fiscal rules. The Institute for Fiscal Studies has already warned that any increase in NHS funding above 2.5% is likely to mean real-terms cuts for other departments, or further tax rises to come in the budget this autumn. This could mean a budgetary squeeze for areas such as local government, the justice system and the Home Office, despite reports that policing would receive an above-inflation settlement. The Chancellor has already insisted that her fiscal rules remain in place, along with Labour's manifesto commitment not to increase income tax, national insurance or VAT. She will say on Wednesday: 'I have made my choices. In place of chaos, I choose stability. In place of decline, I choose investment. In place of retreat, I choose national renewal. 'These are my choices. These are this Government's choices. These are the British people's choices.' Other announcements expected on Wednesday include £39 billion for social and affordable housing over the next decade as the Government aims to meet its target of building 1.5 million new homes by the next election. The Treasury said this would see annual investment in affordable housing rise to £4 billion by 2029/30, almost double the average of £2.3 billion between 2021 and 2026. The additional spending has been welcomed by homelessness charities, with Crisis calling it 'a determined political signal that housing really matters' and Shelter describing the move as 'a watershed moment in tackling the housing emergency'. The Chancellor has also already announced some £15.6 billion of spending on public transport in England's city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk. There is also expected to be an extension of the £3 bus fare cap until March 2027 and an extra £445 million for upgrading Welsh railways. But one of the big losers from the spending review could be London, which is not expected to receive funding for any significant infrastructure projects or powers to introduce a tourist levy – both key requests from Mayor Sir Sadiq Khan.
