Decline in Private Rental Advertisements Observed in London's Housing Market
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In the heart of the city, London's housing market is facing a severe crisis. According to recent research conducted by the London School of Economics (LSE) and Savills, commissioned by a partnership led by London Councils, the number of Londoners living in temporary accommodation has reached an alarming 166,000.
The research reveals a stark decline in the availability of private rental properties since the pandemic. In London, the number of properties available for rent has fallen by 41%, a figure significantly higher than the national average of 33%. This decrease is particularly pronounced in listings for four-bedroom properties, which have almost halved (46.6%) over the same period.
The shrinking rental market in London is also reflected in the increasing number of rental properties being advertised for sale. Since the pandemic, this figure has more than doubled, and the trend is on the rise.
To make matters worse, rental prices listed by London landlords are currently 20% above their pre-Covid level in March 2020. This situation has led to a significant increase in the monthly expenditure by London Councils on temporary accommodation, which now stands at over £52m each month.
Darren Rodwell, London Councils' executive member for housing, has described the current situation as a national emergency. He has highlighted that the capital's broken housing market is exacerbating the pressures faced in London and that urgent action is needed from the government to help households avoid homelessness and reduce the number in temporary accommodation.
London Councils is calling for the government to boost investment in building more affordable homes. They are also urging ministers to raise the Local Housing Allowance (LHA) to cover at least 30% of local market rents. This move would help mitigate the impact of the freeze to the LHA since April 2020, which has significantly reduced the number of properties affordable in London under LHA, as the research shows.
The crisis has made London the epicenter of England's homelessness crisis, accounting for two-thirds of temporary accommodation placements. The contraction of the buy-to-let market, with landlords exiting the sector, and the ongoing challenges posed by fast-rising private rents, reduced availability of rental properties, and London's longstanding shortage of affordable housing, are all contributing to the worsening situation.
Darren Rodwell has warned that the situation in London is becoming disastrous, with fast-rising private rents, reduced availability of rental properties, continuing cost-of-living pressures, and London's longstanding shortage of affordable housing all compounding the challenges faced by low-income households seeking affordable accommodation.
The image accompanying this article is of João Barbosa.
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