London Rents: 4% High And Rising

Graph from the London Assembly Green Party

Graph from the London Assembly Green Party

If rents outside London are high, they’re even higher inside the capital, new Office of National Statistics (ONS) figures reveal today.

Private rents in London have risen by 4.1% in the year to September 2015. In contrast, the Consumer Price Index (CPI) recorded a fall of 0.1% in the same period.

What does this mean? It means rents are rising faster than inflation, and with low interest rates and a flat CPI, there’s no reason other than response to demand for rents to go up. Green Party AM Darren Johnson said:

“The Mayor has refused to back rent controls and more secure tenancies, which could help people facing particularly big hikes. Just saying he is building more homes doesn’t cut it, especially when so many are snapped up by investor landlords to let out at very high rents out of the reach of ordinary Londoners.”

It’s not the first time that rent controls have been called for as a solution to the capital’s chronic housing problems, but are they part of the answer? A recent report by the Cambridge Centre for Housing and Planning Research for the London Assembly suggests that rent controls could cause more problems for tenants than they actually solve. The Guardian article states that a survey of landlords found 31% would sell their properties if rent controls were introduced. But while the mere act of selling the property doesn’t remove it from the market altogether, it doesn’t necessarily help people who actively want (or need ) to rent.

Homelessness charity Shelter say reforms, such as longer term tenancies and rent rises linked to inflation, could produce a more secure rental market than blunt rent controls. But with a seeming general inertia from the government over the private rental market, it could be some time before we see any changes.

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