New research commissioned by London Councils has revealed that only 5% of private rental listings in the capital are affordable to low-income households using Local Housing Allowance to pay their rent.
The figures come as part of a new report which found that, up until April 2021, London’s private rented sector was growing – between that date and last December, though, 45,000 rental properties were sold in the capital without being replaced. This accounts for around 4.3% of London’s privately rented homes.
It is estimated that homes sold by landlords to owner occupiers are worth an average of £410,000 each across the capital.
Housing crisis
Approximately 2.7 million private renters – the equivalent of 30% of the population – are based in London. Around 400,000 rely on LHA to cover housing costs. London Councils says that the report reinforces its concerns that reduced housing availability is putting more low-income Londoners at risk of homelessness.
The organisation has already warned that the housing crisis risks breaking budgets in the capital.
“These stark figures are the latest evidence of the massive pressures faced by low-income private renters in the capital,” said London Councils’ executive member for housing and regeneration, Cllr Grace Williams.
“London’s homelessness emergency is fundamentally driven by the chronic shortage of affordable housing.”
Budget actions
As we draw closer to chancellor Rachel Reeves’ autumn budget, London Councils is calling for the increase to LHA rates to become permanent, with annual updates included to ensure they stay in step with market conditions.
The organisation is also calling for more funding to be allocated to local authorities to enable them to purchase housing being sold by private landlords, in turn improving the availability of accommodation to offer homeless households.
Capital boroughs are further looking for a doubling of the Homelessness Prevention Grant – London boroughs received £157m from the government via this grant for 2024/25.
Cllr Williams added: “Further action at a national policy level can help us turn the situation around and we are committed to working closely with the government on this important agenda. Interventions such as increasing LHA rates to keep pace with rent rises would help prevent homelessness and save public money in the long run.”
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