London (Parliament Politics Magazine) – Experts warn that Labour’s housing reforms are pushing landlords to sell, raising rents and risking an ageing population as young people move away.
As reported by The Telegraph, housing experts have raised concerns that Labour’s tightening regulations on landlords could turn London into an “ageing city.”
What did Stacy Eden say about London becoming an ageing city?
The reduction in rental property supply is contributing to higher rents. Experts have expressed concerns that rising housing expenses could push younger people out of London, risking the city’s economic growth.
Stacy Eden from RSM stated,
“You could have a situation with London where it becomes an aging city, and the average homeowner age in London keeps going up.”
He said,
“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 highlights that rising house prices are driving more people in their 30s and 40s to move out of London.
He stated,
“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.”
Mr Eden added,
“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.”
What role are Labour’s reforms playing in the rental crisis?
According to new ONS figures, private rental costs in London rose to £2,243 in April. The UK House Price Index reports that the standard home price in London currently sits at £556,000.
Rental prices have accelerated since the pandemic, driven by increased taxation on landlords and Angela Rayner’s upcoming Renters’ Rights legislation. Under Labour’s proposed laws, “no fault” evictions will be prohibited. The changes also seek to limit rent hikes, causing many landlords to sell their properties.
What did Tom Bill say about the future of London’s rental market?
According to Tom Bill of Knight Frank, if rents keep climbing, “the demand might shift even further outside the M25.”
He stated,
“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.”
What did Angharad Trueman say about rental affordability and falling lets?
Angharad Trueman, president of ARLA Propertymark, who represents property agents, stated,
“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.”
He said,
“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.”
Mr Trueman stated,
“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,”
adding,
“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.”
What did Meera Chindooroy say about London’s rental crisis?
Meera Chindooroy of the National Residential Landlords Association said,
“Rents across the capital are high because there are not enough homes to meet demand.”
She added,
“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.”
What did the government spokesperson say about the housing crisis and Renters’ Rights Bill?
A spokesperson for the Ministry for Housing, Communities and Local Government stated,
“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.”
They added,
“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.”
Rising housing costs threaten to weaken London’s economy
A steady flow of workers has made London’s economy more productive than the rest of the UK.
Since the pandemic, increasing housing costs threaten to bring London’s economy in line with the rest of the country, possibly stalling its economic growth.
What did the global wealth report say about London’s millionaire exodus?
According to an annual global wealth report, London’s millionaire population has decreased by 11,300 over the past year, including 18 centimillionaires and two billionaires. London now has 215,700 millionaires.
New World Wealth revealed that London is one of just two cities in the top 50 to experience a decline in its millionaire population. Moscow is the other city.