London’s rental market has become a “nightmare”.That’s why


For Rebeca Blázquez, the past few weeks have been a “nightmare”.

The 22-year-old university graduate, who lives in Madrid but hopes to find work in London before studying for a masters, spent a month scouring the internet for rooms to rent In London, the budget is £900 ($1,070).She sent dozens of messages to landlords and tenants who moved out, logging on Virtual inspection of the room only to find that the room is already occupied.

“I think I sent over 100 messages to different ads and I only had [a] Reply to 30 messages,” she told CNN Business.

Renters, Realtors and Property Search Experts describe frenzied scramble for rental units since spring as students and workers flock City After the epidemic.

The surge in demand collided with a sharp drop in supply. The number of homes available to rent in London fell by almost a quarter between July and September compared with the same period in 2021, according to online property portal Rightmove. Prices surged to new all-time highs as a result.

The average monthly rent (including bills) for a shared house or flat comes to £933 ($1,109) According to SpareRoom, the country’s largest roommate search site, the number of roommates was up 17% in October from before the pandemic.

Blázquez said the experience of finding an apartment this fall has been very different from the last time she rented in the city in September 2020. She had settled on a place earlier this month, but paid nearly £300 ($357) more for a similarly sized room in a less-than-ideal location.

“I rented it without watching the video or anything because I was so desperate,” she said.

Matt Hutchinson, SpareRoom’s director of communications, told CNN Business that in recent months the capital has seen a “massive influx” of students, young people and overseas workers – requiring the outbreak to continue to be contained.

At its peak in September, there were almost 9 people looking for every room listed on the site.

“We’ve never seen a market like this,” Hutchinson said.

While demand has eased slightly since September, it remains above the average summer peak, when the market is usually busiest.

“If someone has advertised a room in the past few months, they’ve likely gotten hundreds of responses,” Hutchinson said. “Even getting a response or getting an agent to see you is a battle,” he added.

Renters across the UK are having to go to great lengths to find a room.

In a SpareRoom survey of UK renters in September, one in five said they ended up paying several months’ rent upfront, while another fifth said they had to bid more than the asking price to get a room .

Nearly half said they had to decide whether or not to occupy the room during a viewing.

Greg McLoughlin told CNN Business that when he embarked on an “exhausting” six-week house hunt in early October, he was routinely asked for a deposit equivalent to eight weeks’ rent — usually Twice four weeks.

McLaughlin, Man who works at a cryptocurrency exchange says he “rarely gets any response” on SpareRoom despite paying him One A £11 ($13) weekly subscription allows him to respond to an ad within seven days of it being published.

He ended up snapping up a room in a five-bedroom house It was rented in south London for £950 ($1,130), although the landlord warned rents could rise. Still, he breathed a sigh of relief.

“Everyone was very nervous about finding a place to live,” McLaughlin said. “You can’t hesitate in this market,” he added.

The problem is simple. There are too many renters chasing too few available homes.

Jeremy Leaf, Founder The head of Jeremy Leaf & Co, a north London real estate agency, told CNN Business that the number of properties advertised on his website has dropped by 40% compared with last November.

Landlords have been leaving the rental market because it has become less profitable.

Since 2016, the UK government has increased its incentives for buying a second home and Reduce the amount of taxes landlords can demand on mortgage payments.

Many landlords also worry that evictions will soon be difficult Difficult Tenants – Including Those If the government passes draft laws banning “no-fault” evictions, they could default on rent, cause damage or abuse their roommates, Leaf said. Landlords can go through different procedures to evict tenants, but this usually takes longer and may involve a court hearing. Parliament is expected to vote on the new legislation before the end of the year.

Combined with rising inflation, rental properties are no longer as profitable as they used to be.

“Just the cost of getting people to renovate their properties, the cost of materials has skyrocketed,” said SpareRoom’s Hutchinson. “More and more landlords are leaving the market because they can’t afford it,” he added.

Amelia Greene, director of real estate agency Savills, told CNN Business that some landlords have even decided to take advantage of this year’s rise in home prices to sell their homes. Average asking prices in the capital are up 5 per cent so far this year, according to Rightmove.

Compounding the supply crunch this year, Leaf said, more tenants are deciding to stay put and renew their current leases for smaller rent increases than elsewhere.

A sharp rise in mortgage rates is also keeping aspiring first-home buyers stuck in the rental market, further reducing the amount of available inventory.

Rent prices in London may have cooled since their “pretty unprecedented” rise in the summer, Leaf said, but the city’s chronic supply shortage meant further increases.

“The upward pressure on rents will increase,” he said.

The average monthly rent for a two-bedroom apartment was £2,226 ($2,646) last month, Rightmove data showed. That’s a 19 percent increase on February 2020, before the pandemic drove large numbers of workers out of the capital.

Savills expects average London rents across all property types to rise by another 5.5% next year.

Those who paid less had to make major compromises.

sally vince who Works in commercial real estate and told CNN Business that after spending £700 ($832) looking for her room this summer, she was “very nervous” about what she could get.

“[I] Paying less rent, but I had to compromise a lot in terms of the number of people I was living with … the amenities available and the overall condition of the apartment,” she said.

Vince compared her search to her previous apartment searches in 2019. At the time, about half of room advertisers responded to her inquiries, but this year, she received only three responses out of 50 requests.

“I’ve got a regular job now, I know how it works and know a lot of people in London, but this time it’s much more difficult,” she said.

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