THE COST of renting a property in London will continue to soar over the next decade, according to an academic paper released yesterday.
Professor Michael Ball of the University of Reading found that the supply of housing will keep failing to keep up with the needs of the capital’s workers.
While the government claims that London will benefit from between 34,000 and 38,000 new households each year until 2028, the report says the number will in fact be a more modest 21,000.
“This will result in a significant housing shortage, with people either paying more, crowding into existing homes or being priced out of the city, until effective demand matches supply,” said chartered surveyor Cluttons, which commissioned the research.
Rents are thus on course to rise by five per cent each year for the next decade, Professor Ball estimates, “exceeding house price growth of around four per cent per year”.
“The private rented sector feels the strong pressures of a growing population and workforce, being both the first point of contact and the safety option for many people searching for housing,” said Cluttons’ Lynn Hilton. “The demand from tenants wanting to live in the city will underpin rental growth at a level ahead of the historic long term trend.”