Bidding wars, huge rent spikes and eviction threats: Inside London’s growing rental crisis

Tenants face spending more than £2,000 a month to live in one-bed flats in the capital – if they’re lucky, Lydia Patrick writes

Friday 29 December 2023 14:05
<p>London’s rents are continuing to soar – assuming you can even win a bidding war </p>

London’s rents are continuing to soar – assuming you can even win a bidding war

Bidding wars, eviction threats and shock price hikes are now the bleak reality of renting a home, tenants warn.

At the epicentre of the crisis is the capital where there are 25 people for every available dwelling, according to the campaign group Renters Reform Coalition.

Skyrocketing rental prices – in part caused by landlords having to deal with their mortgages going up – are pushing people to food banks and even homelessness as rent prices have soared 31 per cent since 2021, say Savills.

Some tenants are now being forced to bid against other renters, pay months or even years of rent upfront, or sign longer tenancy agreements in an attempt to get a place to live. Four in 10 private renters are paying £1,200 above the advertised rate for their home, according to the New Economics Foundation.

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Data by Statista found renters in London pay an astronomical 78 per cent of their monthly income to rent, but this does not guarantee sound living conditions.

The mayor of London Sadiq Khan has reiterated his long-standing call for rent freezes and campaigners are calling for more social housing and an end to no-fault evictions.

Earlier this month, Michael Gove, the secretary of state for levelling up, housing and communities, blamed the mayor for a lack of homes in the capital and said he would take on council planning departments that take too long to process housing applications.

Ricardo Davies and his partner worried they would face homelessness after they tirelessly searched for a one-bedroom flat for eight months

But this will prove little comfort to renters already struggling to find somewhere to call home.

Ricardo Davies and his partner were living in a £1,400 a month, one-bed flat in Kilburn, west London, when they were served a section 21 eviction notice from their landlord in October 2022.

Mr Davies says that he and his partner were pressured to engage in bidding wars and felt forced to make offers on subpar flats out of fear of homelessness.

The clinical administrator says agents tried to persuade the couple to increase their budget, put down holding deposits instantly and enter agreements of up to three years without break clauses.

The 28-year-old recalled the tiresome eight-month-long search all over London and being shown accommodation in states of disrepair, which averaged £2,000 a month. On one occasion his partner says she saw a “human-sized nappy” on the floor during a viewing.

“We’d often see pictures online where they would look nice, then we’d go to visit and the door would be hanging off the hinges, locks would be broken but when we raised the issues to the estate agent they’d say the last tenants didn’t complain,” he said. “I was functioning at such a high level of anxiety, I felt stressed every single day. There was a real possibility we were going to be homeless, we don’t have family here.”

After an eight-month search and hundreds of applications, they eventually found a property but it did not come cheap; £1,750 a month for a one-bedroom flat in Wembley.

Ting Dalston was told she needed to have a guarantor who earned more than £95,000 a year

The crisis has even reached the suburbs. Ting Dalston had to move out of her Epsom home with her husband and two children, aged 12 and six, when her landlord had to move back from New Zealand.

The 44-year-old writer says she was fortunate to have an amicable relationship with her landlords who never increased her rent – she paid £1,800 a month for a three-bedroom house with a huge garden but could not afford to buy the home, which was put on the market for nearly £1m.

“We lived in a bit of a bubble we were shocked to find out the rental prices in the area,” she said. “I started going for viewings and all the ones that did come up were tiny, rundown or just not very nice and cost £2,500 a month. I still made offers because I was getting desperate, I booked a storage unit and told my parents we were going to have to move in. I thought we were going to be homeless.”

During her six-month search, Ms Dalston was told by one landlord she needed to have a guarantor who earned more than £95,000 a year and entered several bidding wars. Her family found a home in Ashtead just outside of Epsom in September, and now pay £2,050 for a much smaller space.

Cabinet minister Michael Gove says council planning departments are taking too long to process new housing applications

“I had to take a break from doing viewings because it got too much, it was really horrific,” she said. “This country is not suited to renters at all, we’re really penalised. We are trapped in a perpetual cycle, someone else always holds the cards. Your home and livelihood can instantly be turned upside down.”

Siobhan Donnachie, campaigns officer for London Renters Union, said that renters are trapped in a “cycle of insecurity”.

“While a secure home has become a luxury for many, landlords are cashing in on the crisis,” she said. “Those forced to search for a home on the rental market face extortionate prices and bidding wars that only serve to boost the wealth of landlords.

“For many, the cost of renting privately is simply too high. But this crisis is not inevitable. The government can follow the lead of countries across Europe and act to cap rent increases to take the pressure off millions struggling with rising rents. In the long run, we need to see a massive increase in council housing so that everyone can have a secure place to call home.”

In August 2023, Sadiq Khan emphasised the need for rent controls saying: “Private renters make up nearly a third of everyone living in the capital, but they are being constantly let down by a government that refuses to listen and take urgent action to protect them from even greater financial hardship.”

A government spokesperson said: “We recognise the cost-of-living pressures that tenants are facing, and that paying rent is likely to be a tenant’s biggest monthly expense. That’s why we are taking action to support them, providing £104bn over 2022-2025 to help households and individuals with rising bills, an average of £3,700 per household.

“Our landmark Renters Reform Bill offers better protections for tenants by abolishing section 21 ‘no fault’ evictions and redressing the balance between landlords and tenants.”

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