London’s rental market is in crisis. Here’s how renters are affected.

On Feb 6, 2023

Stories about soaring rents and the search for a new place to live taking months are all too common in London right now. The city’s rental market is in crisis, and renters are facing the consequences.

One of them is Daniel Lloyd, who lives with his flatmate in southwest London. After living in their two-bedroom apartment for almost a year, their landlord asked them to pay 27% more rent.

“We were shocked at how high the rent increase was,” he told CNBC’s Make It. While they were expecting their rent to go up, they had not anticipated it being by that much.

“We were willing to accept an acceptable level of increase. However, going close to 30% would have been an increase of just over £4,000 [$4,854], and we were not going to be earning an extra £4,000 by the end of the tenancy,” Lloyd explained.

They would therefore not be able to afford the higher rent, and would be forced to move. But as rent prices have gone up across the city, they would likely have to move further from the center — somewhere with worse transport links and away from their local community.

“None of the areas that we’ve found potential properties for would really suit our living situation,” Lloyd said.

Him and his flatmate also realized that most other renters in their building were facing the same issue. They got together and tried to push back against the rent increases after realizing that their landlord was breaching their tenancy agreements, which limit how much rents can go up.

Some of Lloyd’s neighbors have heard back from their landlord through the property manager and new, lower rent increases have been suggested, but most are still worriedly waiting.

Buying instead of renting?

Dave Chawner was in a similar situation and moved out when his landlord proposed a 26% rent increase.

“When we said, ‘look, I think it’s reasonable that there is going to be inflation, I think it is reasonable that prices do go up. We will negotiate at, say, 15%. Does that sound good to you?’ And they said absolutely not. It’s a 26% increase or nothing,” he told CNBC’s Make It.

The rent increase was unaffordable for them and would have slashed their budget for food and bills, Chawner said.

Chawner and his partner were already saving and were able to buy an apartment together when they did move. Their mortgage is now lower than their increased rent would have been.

“We were incredibly fortunate in order to be able to buy somewhere,” Chanwer said, adding that he is very aware that most of London’s renters are not in the same position.

He is not, however, the only person opting to buy, explained Richard Donnell, executive director of research at real estate company Zoopla.

“We’re seeing people sort of leaving rented accommodation to buy property and just looking further afield. So that’s one approach. And actually the fact that rents are going up so fast themselves will push some renters into buying,” he told CNBC’s Make It.

A recent survey by housing charity Dolphin Living,…