Two in five renters forced into debt to live in London, poll finds

Unaffordable rent does not guarantee a good location, with 38% of respondents commuting for over an hour to reach their jobs. More than half (52%) of renters aged 18 and 34 cited proximity to their workplace as a top priority after affordability, compared with 19% who prioritise living near friends and family.

The average London renter now spends 41% of their monthly take-home pay on rent. For 32%, half or more of their income disappears into housing costs before other essentials are covered.

Rent hikes are becoming increasingly unaffordable, with three-quarters of renters having previously had to make changes to other expenditures to afford a past rent increase and more than half of renters unable to afford a future above-inflation rent increase.

Close to half (47%) of renters think it is unlikely they will ever afford their own home in the capital, with 40% less confident than six months ago.

To afford rent, 46% of house-sharers – often younger workers and key service providers – have cut non-essential spending. Families are also under strain, with 35% of renters with children under 18 taking on extra work.

Renters have been forced to adjust their expectations downward due to cost of living pressures, with what they consider a ‘comfortable’ rent limit decreasing from 41% of income in 2022 to 38% today.

Private renters showed increasing awareness of affordable housing tenures in London. Thirty-eight per cent had heard of intermediate rent, up from 25% in 2022, and 63% are interested in accessing it, up from 41% in 2022. A total of 64% were interested in accessing social rented housing, up from 50% in 2022.

Olivia Harris, chief executive of Dolphin Living, said: “Without decisive intervention to address rental affordability and availability through the delivery of more intermediate rental housing, London risks becoming increasingly inhospitable, with its social fabric, economy and future prosperity in jeopardy as a result.

“The findings of this research make clear that the current trajectory is unsustainable, with housing affordability becoming a major barrier for the city’s workers. For many, this decision is based on necessity rather than a lifestyle choice due to the very nature of the work they do.

“This is why we not only need to reverse the decline in housebuilding in London, but also build homes to support this critical cohort of London’s renters. Central to this is the delivery of more intermediate rental homes, which 63% of those polled have said they would be interested in.

“In addition to addressing this socio-economic crisis, the provision of intermediate housing will also improve development viability and deliver more homes overall.”

London mayor Sir Sadiq Khan has introduced a new rent-controlled housing product called Key Worker Living Rent, aimed at key workers who are unlikely to secure social rented homes but struggle to afford market rent.

The mayor has urged housing associations and councils to work with City Hall and bid for funding for Key Worker Living Rent homes through the London Social and Affordable Homes Programme.

City Hall aims to start at least 6,000 key worker homes by 2030.