Katharine had been renting in London for nearly two decades, almost all her adult life, when she lost her job last year. No longer able to afford £900 a month to rent her one-bedroom flat in Crystal Palace, she relocated to Stratford-upon-Avon.
But she missed the capital. “I’m a Londoner through and through,” says Katharine, 40. “Coming back was a matter of when, rather than if.”
This spring Katharine got a new job and started making moves to return. But any hopes of a triumphant homecoming were quickly punctured. She soon discovered that the sum she had budgeted for a one-bedroom flat well outside the city centre got her much less than it did 12 months ago – if it got her anything at all.
The cheapest properties she could find cost more than £1,000 a month, about £150 above her price range. Those that were listed for less were snapped up, regardless of quality.
Several times Katharine made the five-hour round trip from Stratford to London for viewings, only to find that the flat had already been let – or was being fiercely contested. “There were literally queues outside,” she says. After three months she realised that she could not afford to wait for a flat that she liked; she would have to chase whatever she could afford. “I was desperate,” she says.
Renters are used to having to make compromises between what’s available and what’s affordable, what will suit for now and what to aspire to. This summer, however, tenants looking for a new home are finding it increasingly difficult.
A shortage of housing and a rise in demand have driven up prices – and not just in London. The Office for National Statistics says that rents increased by 3.2% across the UK in the past year, the fastest rate since the financial crisis.
View image in fullscreen Illustration: Alexander Naughton/The Guardian
Dan Wilson Craw, the deputy director of Generation Rent, says this summer’s squeeze reflects pressures put on housing through the pandemic. “It’s really shocking to see how it’s still reverberating.” Young people who moved back in with their parents in the past two years are now seeking places of their own; many of those who left cities to work remotely are now wanting to come back, as employers ask them to return to offices.
There has also been increased demand – from those who can afford it – for more space. “People working from home, even if only occasionally, are looking for one more bedroom than they would have sought previously, which has created more competition,” says Wilson Craw.
Meanwhile, the number of homes to let has drastically shrunk. The trade organisation Propertymark found that availability has halved since 2019, due in large part to a mass exodus of private landlords. An unusually high number have sold up in response to factors including high house prices, legislative reforms to protect tenants and improve conditions (disincentivising rogue operators), and what has been termed “the great re-evaluation”, with many people rethinking their lives after the pandemic. Lucrative holiday lets are also reducing the availability of property for long-term rent.
The result is more people jostling for fewer rooms – even in places where supply has previously satisfied demand.
A recent analysis, by the property market consultancy Dataloft, found that affordability has plummeted in towns including Rotherham, Bolton, Salford, Walsall and Dudley since the pandemic. Across the UK, it has become commonplace for prospective tenants to be asked how much rent they are willing to pay, with the property going to the highest bidder – sometimes as much as £300 over the asking price.
Those properties on the affordable end are being snapped up unseen, often within minutes of being listed online.
View image in fullscreenBlack mould, often found in badly maintained properties. Photograph: Andrei310/Getty Images/iStockphoto
Imo and a friend, both 25, began their hunt for a two-bedroom flat across north and east London in June. They made 20-odd inquiries, but were fast enough to view only five. “New places would be gone by the end of the day, making viewings near impossible,” says Imo – and each of their three bids was readily exceeded by others.
Eventually they were offered a flat in Newham, east London, not yet on the market. It was listed as furnished but came without beds; it was available a month later than they needed, had a washing machine full of mould and “had not been cleaned in about a month”, says Imo. The estate agent told them they could take it as it came, or find somewhere else. They took it.
“It’s made me very wary to move again,” says Imo. “Agents and landlords are treating this as a game, not considering how it impacts renters.”
Some might say that renting in London has been challenging for years, but a sharp reduction in supply – dating back to at least last summer – has exacerbated the problem. New figures from the estate agent Chestertons show that the number of homes available to rent in the capital fell by 38% in the year to July.
“It’s a total disaster in London right now,” says John Myers, a co-founder of London Yimby (standing for Yes in My Backyard), advocating for affordable housing. “Rents have jumped, people are just not able to find something they can afford … There’s a real crunch.”
London’s smallest microflat sells for 80% above asking priceRead more
On social media, listings are circulated with unnerving regularity for studio flats where the shower is next to the kitchen sink, or lofts with such low ceilings that you can’t sit up in bed. Though the pictures are darkly comic, the real punchline is the asking price – often, in London, well in excess of £1,500 a month – and the knowledge that someone will certainly pay it.
“It’s a classic kind of shortage economy,” says Myers. “There are a few good-quality flats out there but they cost the earth, and are out of range for anyone on a normal salary.”
Even those on good salaries are finding it hard. “It’s hell,” says Julia, 22. She and her partner, 23, had been planning to move from Cambridge to London this month and have a joint annual income of about £132,000. They do not want to spend more than £2,500 a month on rent, as they hope to buy a home one day. But even that budget no longer stretches to a two-bed in zone two.
“Prices have just gone up so much,” Julia says. “We’re in an objectively very fortunate position, but we’re still struggling to find somewhere within budget.” In the past, “you used to be able to compromise” on available properties, she says; now, hardly anything is within reach. She was shocked to find that the small three-bedroom flat she rented with friends in Maida Vale in 2020, and which “reeked of mouse”, has gone from £2,250 monthly to £3,400 in just two years.
With their relocation only waiting on a place to live, the search has been taking its toll on Julia. “It’s not good for your anxiety to be checking your phone 20 times a day, whenever a property comes up, and deciding if you like it,” she says.
View image in fullscreen Photograph: designer491/Alamy
Londoners’ complaints about renting used to be met with broader indifference as the cost of big-city living. But now, strikingly, the problem is spreading rapidly across the country.
Figures from the property site Rightmove show that market rents across the UK increased by nearly 12% between the second quarter of 2021 and the same period of this year – equating to an extra £119 a month on average, or £1,428 a year.
Those who had already moved out of cities in search of affordable housing may now be feeling as though the crisis has caught up to them.
Fi left London for Essex four years ago, in part because she has a disability and cannot work full-time. Earlier this year she and her partner, Paul, both 33, decided to look for a place to rent together in his Suffolk home town. They soon realised that they would have to act fast. “The number of people trying to get to each place was just insane,” says Fi.
On the day she ended up in hospital for an operation, the couple had two viewings booked. Fi told Paul to go ahead without her. “I said, ‘We don’t have a choice. We need somewhere to live.’”
One house was more or less ideal; Paul was told that if he was interested he would have to apply on the spot. “It came down to a case of fastest finger first – so I was filling in application forms from my hospital bed,” says Fi. “It’s just the kind of craziness of the rental market that they couldn’t wait.”
Their application was supposedly successful, but, with two weeks to go until their move-in date, they have not been asked to pay a deposit or sign a lease; Fi is still worried that it might fall through. In the meantime, she and Paul are sharing a room at his parents’ house, sleeping in single beds.
“We’re stressed out about it all the time,” Fi says. “We’re supposed to be moving in two weeks and we still don’t know if we’ve got the place and what will happen, or if we’ll have to start from square one again.”
In such an overheated market, landlords can dictate their terms, such as requesting that financial records be included with applications, or for six or even 12 months’ rent to be paid in advance.
Nearly 20% of LGBTQ+ private renters said they felt they had been discriminated against
Tenants for new leases are selected on the basis of uncertain, potentially discriminatory criteria. Katharine feared that her surname, of Slavic origin, would disadvantage her against the competition. “Anybody with a name that’s not Anglo-Saxon will get a little bit paranoid, especially with Brexit,” she says. One Generation Rent survey found that 19% of LGBTQ+ private renters said they felt that they had been discriminated against on the basis of their gender identity or sexual orientation.
Lucy, 27, explored houseshares and “co-living” homes for her move to London from Manchester, without success. She ended up shelling out for a studio flat in Stockwell, south London. “I’m paying a lot more than I originally intended, but the process was causing me to have sleepless nights,” she says.
When the estate agent asked Lucy to drop the six-month break clause that she had requested in her offer, she agreed – anything, she says, to put a stop to the insecurity and “the endless scrolling”.
Lucy points to figures from the flat-sharing site SpareRoom, showing that since 2011 it has seen a 239% rise in 55- to 64-year-olds looking for houseshares. Relative to other prospective renters, she was lucky to have options, she says; “Yet I can’t help but be bitter about the overall process.”
Some unscrupulous landlords are capitalising on the crisis by increasing rents mid-lease, confident in the knowledge that if their existing tenants refuse to pay it, others will. A recent Generation Rent survey of private renters found that 45% had been approached about a rent increase in the past year, with one in five (20%) asked for more than £100 a month extra.
Though some successfully negotiated a smaller rise, more were forced to accept their landlords’ terms. Some tenants have seen hikes of as much as 20%, says Wilson Craw. “Alongside rising energy bills, it is ultimately going to lead to people losing their homes,” he says.
On top of the cost of living crisis, the squeeze in the rental market is pushing people into financial hardship or destitution. The homelessness charity Shelter says inquiries about emergency support have risen 177% since the start of the year.
Already Generation Rent’s survey shows that tenants unable to afford rent rises have been forced out into a hostile market. The group is calling on the government to freeze rents for existing tenancies, immediately suspend no-fault evictions (soon to be banned under the renters reform bill) and introduce protections for tenants who fall behind on rent for reasons beyond their control.
View image in fullscreenA ‘microflat’. Photograph: Sergio Azenha/Alamy
Wilson Craw suggests the crisis might force a rebalance of the rental sector. “Landlords are going to start taking a hit because people simply don’t have enough to pay rent, energy bills and everything else.”
Greater taxation and regulation of holiday homes and lets would also ensure they go to tenants, not tourists, while compelling landlords to properly insulate properties would reduce heating costs. But while such measures might help alleviate the immediate pressures of the crisis, they don’t address the root cause.
“In the long term, things will only get better when we start to build more houses,” says Freddie Poser, the director of the Priced Out campaign. “The reason that landlords are able to put the rent up so much is because there is no competition in the sector: there are simply too few places to live.
“We’re calling on the government to tackle not just the short-term crisis, but also face up to the long-term economic damage being wrought by our continued failure to build homes.”
Younger generations in particular are at a disadvantage. According to Dataloft, four in every 10 under-30s are now spending more than 30% of their earnings on rent.
“In a proper world, you wouldn’t have people in their 30s sharing a flat,” says John Myers of London Yimby. “It didn’t used to be this way – and it doesn’t have to be this way.”
Likewise, more social housing will be needed for the increasing numbers who cannot afford market rent. “We need everything: more housing of all types,” he says. “All parts of government need to be pushing on this.”
In the meantime, renters are taking what they can get. Katharine eventually nabbed a one-bedroom flat in Streatham “because I was just refreshing Rightmove every half an hour, for half a month”, she says.
The letting agent had had 30 inquiries about the flat within 30 minutes of it being listed online; Katharine put down a deposit, sight unseen, within 10 minutes. “I realised that I just had to be realistic, and grab whatever was out there that was affordable,” she says.
The flat has proved to be small, and noisy. Katharine hopes to be able to move somewhere more comfortable next year. But, she adds with foreboding: “Who knows?”
All case studies’ names have been changed
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