London’s soaring private rents have seen the number of properties offered to boroughs by a specialist agency fall by 90% since 2022, according to a report today from The Municipal Journal.
Record levels: private rents in London went up by 7% in the past year, according to office figures
The agency, Capital Letters, claims it is being priced out of the market by private landlords who are charging higher rents than can be paid through Local Housing Allowance.
Capital Letters is a not-for-profit company whose owners include some London councils, including Croydon.
It seeks to find properties which boroughs can use to house people on their housing waiting lists. But The MJ says that according to a strategic report for the period up to March 2024, “the number of properties offered to its member authorities went from 2,615 in 2022 to just 257”.
The growing gap between Local Housing Allowance and soaring private rents in London has been blamed for the fall in supply of homes to the councils.
The report said: “In the financial year 2023-2024, the continuing impact of changes in the PRS [private rented sector] and particularly rent increases remained evident, with landlords preferring to let to private individuals able to meet the cost of rent rather than at LHA levels required by our members.”
Research published last year found a 41% reduction in the number of London properties available for private rent since the covid-19 pandemic, while Office for National Statistics data suggests London private rents increased 7% in the year to 2024 – the highest jump on record.
In Croydon, a one-bedroom flat in one of the new, rental-only towers close to East Croydon Station, is being offered at £1,900 per month.
Capital Letters has been forced to make almost two-thirds of its staff redundant, while half of the councils who signed up for its services have now quit.
The MJ reports: “The not-for-profit company lost more than half of its member boroughs last year after councils complained the firm ‘could not supply sufficient properties to help meet our urgent housing needs’, was unable to ‘act nimbly’ and could not ‘influence the market in the way that was hoped’.”
Croydon Council remains signed up with Capital Letters.
Croydon Council declined to comment when approached by The Municipal Journal’s reporter about the drop in properties provided by Capital Letters.
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ROTTEN BOROUGH AWARDS: In January 2024, Croydon was named among the country’s rottenest boroughs for a SEVENTH successive year in the annual round-up of civic cock-ups in Private Eye magazine
Time for rent controls?
Time for punitively high taxation on the purchase of property by overseas buyers, inflating the housing market so that local people struggle to buy or rent. That or introduce a complete ban.
27 per cent of properties sold in the capital were bought by a foreign buyers in the first quarter of this year, up 3 per cent on the same period last year, according to Hamptons estate agency.
Other countries have placed restrictions on non-resident foreigners buying up homes, most recently Canada.
If Starmer’s Labour wasn’t so wishy-washy Tory-lite, we could expect something similar to be brought in here
Every time that’s been tried before, it distorts the market further, further reduces the number of properties available to rent and increases prices.
It has failed everywhere.
Most recently, Edinburgh is a good example, where SNP rent caps resulted in a “housing emergency”.
That’s usually the argument of the wealthy private landlords, as they stuff their pockets with billions of public money from housing benefit
It’s not an argument. It’s the reality.
The only solution to any of this, and something we used to do well for periods of our history, is a massive programme of building publicly owned social housing for rent.
And if they insisted on keeping RTB (first proposed in the Labour manifesto of 1959), then it should be on a strict one house sold, one house built basis.
Germany, France, Spain, Norway, Sweden and the Netherlands all have functioning rent control systems.
London has more than 150,000 Airbnb listings, more than any other city in the world. That, along with Arfur’s point, many properties of which are outrageously, deliberately left empty. There’s so many bolds decisions that would suddenly reduce rent and prices, things are being kept artificially high under the guise of ‘free market’.
Large parts of central London are dying, as much of the housing has been bought for investment and left empty, or as a holiday home used for two weeks a year. Local businesses cannot survive, and are closing. Surely banning non-residents from owning property in London would revive these areas and help the housing provision.