Scant London rentals within reach for people on low income, with only 5% being considered affordable.
In a bid to address the shrinking private rented sector (PRS) and alleviate the affordable housing crisis in London, London Councils and the UK government have proposed and implemented actions to increase affordable housing supply and support rental stability.
Between April 2021 and December 2023, 45,000 rental properties were sold in London without being replaced, accounting for 4.3% of the city's private market. This significant reduction in PRS properties has been particularly pronounced in the most affordable locations to rent, with a 3.3% per month reduction in PRS stock during 2023 compared to 2.6% per month across the rest of London.
In response, London Councils have been actively pushing for greater investment in affordable housing. This includes leveraging planning powers, securing developer contributions (Section 106 agreements), and focusing on building more social and genuinely affordable homes to meet rising demand amid the decline in the private rented sector.
The UK government has been supporting affordable housing through funding programs such as the Affordable Homes Programme, which provides grants for building new affordable homes, including social rent, shared ownership, and London Living Rent homes aimed at low-to-middle income households in the capital.
Both parties emphasize boosting housing supply by enabling faster planning approvals and incentivizing construction of affordable and social housing across London boroughs, particularly in more affordable areas like Barking and Dagenham or Newham, where house prices remain relatively lower but demand is high.
Policy approaches also include strengthening tenant protections and measures to improve the quality and security in private rentals to help stabilize this sector despite shrinkage[1][2][3]. While specific proposals from London Councils may vary borough by borough, common themes involve collaboration with housing associations, investment in new council housing, and encouraging mixed-tenure developments.
On a broader scale, the government is expected to address the persistent shortage of residential properties—a driving force behind price and rent increases—through strategic planning reforms and continued financial support for affordable housing initiatives[1][2].
Given the ongoing cost of living pressures and increased borrowing costs which have caused some fluctuation in house prices, particularly in London’s most expensive boroughs, these measures target long-term affordability and access to housing for a wider segment of the population[1][2][4].
Susie Dye, Grants Manager at Trust for London, emphasizes that it's hard for renters on a low income to find a home in London and that the government needs to act to make homes more affordable. She suggests the government should ensure Local Housing Allowance covers the actual costs of renting for those who need it, fund local authorities to support those made homeless in the broken housing market, and invest significantly in building social housing.
Cllr Grace Williams, London Councils' Executive Member for Housing & Regeneration, states that the falling number of privately rented homes in London and the worsening shortage of affordable accommodation are an urgent challenge for Londoners and London boroughs. She advocates for further action at a national policy level to help prevent homelessness and save public money in the long run.
The findings of the research released this morning by London Councils reinforce concerns that the reduced availability of privately rented homes in the capital puts those on a lower income at an increased risk of homelessness, an issue that has recently infected the area.
In related news, the UK Infrastructure Bank has been rebranded as the National Wealth Fund.
[1] London Councils (2023). London Housing Strategy. [Online] Available at: https://www.londoncouncils.gov.uk/sites/default/files/2023-04/london-housing-strategy-2023-2027.pdf
[2] Trust for London (2023). London's Rental Crisis: The Struggle for Affordable Homes. [Online] Available at: https://www.trustforlondon.org.uk/what-we-do/our-research/reports/londons-rental-crisis-the-struggle-for-affordable-homes/
[3] Savills (2023). London Rental Market Update. [Online] Available at: https://www.savills.co.uk/research-analysis/uk-housing-market-research/london-rental-market-update
[4] Office for National Statistics (2023). House Price Index, UK: April 2023. [Online] Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/housepriceindex/bulletins/ukhousepriceindex/april2023
- The UK government's Affordable Homes Programme, which supports the construction of new affordable homes, is a primary method used to address the persistent shortage of residential properties in London.
- London Councils are focusing on increasing affordable housing supply by leveraging planning powers, securing developer contributions, and building more social and genuinely affordable homes, particularly in areas like Barking and Dagenham where housing demand is high.
- Susie Dye, Grants Manager at Trust for London, calls for government intervention to make homes more affordable, suggesting measures such as ensuring Local Housing Allowance covers the actual costs of renting, funding local authorities to support the homeless, and investing significantly in building social housing.
