THE NUMBER of renters in the capital has grown dramatically over the past 10 years, with 50 per cent of people now renting, according to Cluttons, a property consultancy.
While 30 per cent of people in the UK rent, the figure is much higher in London. Private tenancies now make up a quarter of occupancies, rising from 15 per cent a decade ago. Another quarter rent their properties from social housing institutions.
The report cited the rising prices of London property as one major reason for this emerging gulf.
While property markets in the rest of the country have struggled to return to price levels seen before the financial crisis, interest and capital from around the world helped London’s market to surpass them some time ago.
Professor Michael Ball, who conducted the study, cited an absence of supply-side reforms as one of the major limits on home ownership in London. He drew attention to some of the problems with housing: “widespread conservation areas; a tightly drawn, rigidly enforced green belt; and other restrictive planning constraints are endemic”.
The fact that younger people move to London for education and employment, while older people often move away also contributes to the overall picture, according to Ball. Younger people are more likely to rent, while older people make up a much larger proportion of owners.
Hometrack also released its monthly housing survey yesterday, showing a similarly stronger performance in London compared to the rest of the country. Property prices in London rose 0.9 per cent on the month, while the rest of the UK’s prices crept up by just 0.1 per cent.
The survey also showed the lack of supply in London and the south east: while demand has risen 15 per cent in the past six months, a paltry 0.6 per cent rise in supply caused the biggest rise in prices since 2007.