For the quarter of London households that now rent – a figure that’s anticipated to reach 40 per cent of Londoners by 2020 – the rental picture isn’t a very pretty one.
According to lettings insurance firm HomeLet, the average rent has increased to £1,348 per month in the capital, the highest on record. London renters pay almost double that of the rest of Britain and spend around 57 per cent of their income on rent, which is nine per cent more than three years ago.
But though Londoners pay more, they don’t always get a good deal. Mayor of London Boris Johnson’s new accreditation system, the London Rental Standard, aims to rid the capital of dodgy landlords and boost supply of high-standard options.
Landlords sticking to rules on protected deposits, property conditions and faster repairs will be awarded a ‘Boris badge’.
Johnson wants 100,000 landlords and lettings agents signed up by 2016 and supports purpose-built rental schemes in Stratford and Elephant & Castle.
But until supply improves, many tenants will still pay through the nose. Three years ago, Jon Randles moved to London from Liverpool and has spent most of his earnings on pricey rentals sourced through lettings agencies.
‘I rented a one-bed flat in Maida Vale,’ says 33-year old Jon, who paid a month’s rent in advance as a deposit. ‘I had to pay £1,600 a month and sign a year’s contract. It was extortionate.’
Like many tenants, gas engineer Jon also had trouble with bills and repairs. ‘It was a nightmare getting repairs done,’ he says, ‘and I don’t want to pay water rates and council tax, I just want a room.’
His solution has been to rent a room from a live-in landlady, which gives him flexibility.
‘It works well,’ he says. ‘I work all day and she works at night so we don’t see each other much. She likes renting to guys as she says we look after ourselves, like cats!’
Jon now pays £130 per week, has no bills on top, and enjoys the peace that comes with sharing with someone older – and the fact his current home is well-maintained and clean. ‘I’m over that party stage of sharing with five others,’ he says.
The government’s Rent a Room scheme allows owners to earn up to £4,250 per year tax free.
Spareroom’s Matt Hutchinson says Londoners can typically earn around £639 per month but he’d like the tax threshold raised to £7,500 to encourage more private landlords into the market.
He says flat-sharing is booming thanks to expensive rents – and he doesn’t think the Boris badge will help London renters.
‘Most rogue landlords won’t be signed up,’ he explains. ‘The wider problem is a private rented sector dominated by amateur and accidental landlords, who don’t always know their responsibilities.’