By Beatrice Morandi
London cannot get out of the vortex of the real estate crisis, especially after Covid-19. In the last year alone, about 10,000 municipal housing units across England have been demolished or sold, with 20% located in London, while the Department of Leveling, Housing and Community reported that 1.2 million people are on the waiting list to get an apartment.
In recent times, monthly rents in the capital have increased by almost a third compared to the pandemic’s peak, bringing the advertised average cost to a new record of £2,631, according to Rightmove.
Considering that the average household income stands at £3,066 per month, or £36,800 per year, more than 85% of household earnings are now allocated to paying rent.
While there are legitimate arguments about rising costs for landlords, it is undeniable that this rent crisis is also fueled by greed and opportunism, with some taking advantage of the growing demand to raise rental prices.
Currently, there are on average 19 people visiting each property in search of a housing solution, according to data provided by Foxtons.
As stated by Roberto Casani, an Italian expatriate engineer in London: “More or less every year it happens that for some reason we have to move house. Last year I was looking for a room and I showed up to see a house that had a sign at the entrance queue and in front of me I had 25 other people,” he says looking at his feet. “Impossible to hope for an opportunity.”
“I have a great salary,” he goes on, “I work for a computer company and I could afford to pay £1700 on my own, but I suffer from anxiety and prefer to have company around me. I currently spend £980 for a room plus bills; I can afford it, but there are many people who can’t do it. After Covid, everything got worse; there is no more respect for tenants.”
This situation is pushing young tenants and families on the margins of London and beyond to move away from their communities, workplaces, schools and childcare services.
As reported by The Evening Standard, Winkworth reported a “20% increase in the number of tenants moving from London to Reading, but also to Newbury and even Northampton”.
This will have a significant impact on the city’s vitality and its future, especially considering that Brexit has already contributed to drastically reducing the population.
Over the past four years, many housing complexes have arisen, financed mainly by real estate companies dedicated to the redevelopment of abandoned urban areas. These companies create apartments with one, two, or three bedrooms.
The prices of these houses are extremely high compared to the surrounding area, often located in Zone 4, where a daily Tube ticket costs £12 and a monthly subscription £190 or more. Rentals for these apartments range from £1800 to £3500.
Gaia Palezzo, 32, a pastry chef from Bologna based in London since 2016, explains: “These homes are beautiful and very well kept. However, the main problem is uncertainty about handling, as no one ever responds to emails. Attention is only given to late payment of rent or when the contract is about to expire.
“I’ve rented seven houses since I moved to the UK, and I have to say the agencies have been the worst. I had trouble breathing because of the white mould, which I found to be highly toxic. Despite that, nobody took any action. The London Council of Tenants was not much help, but thanks to Renters Rights for London I was able to recover my deposit.”
Renters Rights for London was founded in 2019 and deals with helping people in need and shortens the response times that may have a request through the city council.
“Every year, between 150 and 340 people contact the project looking for information or advice and their experiences give me an excellent view where there are shortages in services,” said founder Portia Msimang.
“Currently, the problem of owners and agents applying illegal taxes is widespread. They may try to charge tenants for repairs that are actually the property of the owner, or they may ask for amounts not specified in the lease.”
Private owners often benefit from capital growth, with an increase in the value of properties, and substantial returns that exceed financial burdens such as mortgages and other costs, generating profits.
A quick way to reduce poverty and stimulate the local economy would be to reintroduce rent controls, initially implemented as an emergency measure in 1915 and maintained in various forms until 1989. Currently, over 90,000 of the old regulated leases are still in place, as regulated tenants cannot be cleared as easily as others. Indeed, Sadiq Khan, Mayor of London, has called for the devolution of the necessary powers to introduce rent controls.
In 2019, Renters’ Rights London partnered with Khan to develop a “Blueprint for Reform”, which included a lease model for London and proposals for rent control in the capital. However, this system is highly centralized, with central government holding the main decision-making power.
“Currently, it is disappointing to note how little a significant reform of the housing system has been proposed by any political party. Many seem more inclined to promise a reform of the urban planning system, assuming an increase in the supply of houses is the solution, continued Msimang.
“However, this does not completely solve the problem, as evidenced by the fact that Wandsworth still has almost 12,000 families on the waiting list for communal housing, despite the fact that over 12,000 new housing units have been built in Nine Elms alone.”
Another major problem of the British real estate crisis and specifically that of London is the implementation of Article 21 in May 2023, which states that homeowners may avail themselves of collecting their property at any time and for any reason with a maximum of two months’ notice.
“I lived for rent at £1,200 a month in Zone Four, the house presented mould problems After numerous reports to the agency one day the owner showed up with the police sending me and my wife away, Law 21 is an outrage to the person,” said Peter Birtwhistle, 45, a construction manager.
In 2022, according to The Guardian, 40% of tenants in London left their homes, moving elsewhere and relying on the train or working remotely. The reasons for these exoduses are obvious and at the same time discouraging. The ownership of a house is increasingly beyond the reach of many.
The issue is not just about high prices and agency; there are also situations where the landlord doesn’t exist, and instead, there is a sublandlord who rents out the whole house and then sublets the rooms on websites.
Sometimes life can be hard, as Silvia, 24, (she didn’t want to give her surname for her security) explains: “We were not allowed to bring guests to sleep or for a coffee without asking permission from my sublandlord. Life in the house was difficult; he would come inside our rooms and had toxic behaviour.
“I realized something was wrong with him when his girlfriend broke up with him. He became aggressive with all the tenants, raised the price of the rooms without reason, and then left for three months. So, I left the house because I was scared. I lost my deposit and everything, but that situation was too much for me.”
Listen to what Silvia has to say here:
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