Soaring rents pose a ‘threat’ to London’s competitiveness as youngsters are priced out

Soaring rents in London pose a “threat” to the capital’s competitiveness, a number of business groups have warned, amid fears that young professionals are leaving London due to rising living costs.

Soaring rents in London pose a “threat” to the capital’s competitiveness, a number of top business groups have warned, amid fears that young professionals are increasingly being priced out of the capital.

Rents in London jumped at their fastest rate since 2006 in October, rising 6.8 per cent on the same month last year, according to the latest figures from the Office for National Statistics.

A combination of dwindling supply and rising demand has also led to bidding wars amongst potential tenants as they offer more to secure a place to rent.

Figures from Zoopla, shared with City A.M., showed that one in 10 homes for sale on its website are landlords selling. Of these, more than half are properties in London and the South East.

In October, there were over 76,898 people registered on house hunting app Spareroom looking for a single room to rent in London, but only 16,803 properties advertised.

The average price of a bedroom in a home in the capital is now £1,030, up from £933 the same time last year, according to data from the company. The average price of a room in London in 2021 was £797.

James Watkins, head of policy and public impact at BusinessLDN, told City A.M. that companies across London have told the group that one of their top concerns is the “lack of affordable housing in the capital”.

“This is a pressing issue for firms as they are finding it difficult to fill vacancies with skilled staff and one of the reasons for this is the sky high cost of housing,” he said. “On top of the ongoing skills crisis in London, this is a double whammy for businesses who need great staff to drive growth.”

He added: “This is why we are urging the candidates before next year’s London Mayoral election and the political parties in advance of the general election to make it clear how they will work with businesses, councils and all Londoners to deliver more affordable homes in our city”.

A spokesperson for the City of London Corporation said: “Housing shortages and high housing costs are a threat to the capital’s competitiveness and the ability of City and London businesses to attract and retain the workforce it needs.”

A spokesperson for the Mayor of London said: “The Mayor has been clear that record high rents are a symptom of the housing crisis, which is why he is doing all he can to deliver more genuinely affordable homes across the capital.

“Since Sadiq became Mayor, London has completed more homes of all types than at any time since the 1930s, delivered higher council homebuilding than at any time since the 1970s, and exceeded its ambitious target of starting building 116,000 new genuinely affordable homes in the capital.”