The research revealed that four in 10 of this age group are now spending more than 30% of their pay on rent – an unaffordable level for many young people, as finances are being squeezed, amid rapidly rising living and rental costs, and a fall in real incomes.
Affordability for young people was worst in the South East. In almost all London boroughs, most people under 30 were spending more than 30% of their earnings on rent.
The least affordable areas for young people are concentrated in the capital, and the situation in the city is likely to get worse.
The imbalance between the number of tenants and available rental properties across London continues to cause real concerns.
According to the latest data from Chestertons, which compares July 2022 to July 2021, there has been a staggering 38% drop in the number of properties on the market to rent, whilst the number of tenant enquiries increased by 60%.
With tenants already facing challenging conditions due to the cost-of-living crisis, Chestertons warns that market imbalances of this scale are causing tougher competition and further rent increases. Illustrating this, the agency’s data shows that there were 45% fewer landlords willing to lower their asking rents compared to the same month last year.
Richard Davies, MD of Chestertons, said: “We continue to see tenants who are really struggling to secure a property in London due to the sheer volume of tenants that are fighting over each new rental property that comes onto the market.
“To try and avoid further disappointment, many tenants are offering to pay landlords more rent than they are asking for, but even this isn’t guaranteed to work. Given the drop in rents that landlords faced during the pandemic; some by as much as 30%; we are now operating in a landlord driven market.”
Confirming the upwards trend for London rents are the latest statistics from the Office of National Statistics (ONS), released this month. The figures reveal that London rents rose the most in five years as demand for rentals continued to exceed the supply of properties.
Private rental prices in London grew 2.1% in the year to July. Although this is the lowest growth rate in England, the capital is quickly catching up with an acceleration in rents charged since the start of the year, the ONS said.