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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