A new study shows that London’s rapid rent growth over the past year has prompted a record number of renters to seek shelter outside the British capital.
According to the Daily Mail, 40% of London renters have decided to move out, up from 28% ten years ago.
That’s the equivalent of 90,370 renters who have moved out of London in the last 12 months, according to Hamptons Lettings Agents, a number that has doubled since 2012.
Just over 718,000 tenants have left in the last decade, 62% of which were longer term tenants who moved into their own housing at least 4 years ago.
While homeowners in the capital outnumber tenants by about twice, tenants tend to move in more often and are more likely to move out.
Last year, 90,370 tenants left London compared to 62,210 homeowners who left London.
This is the opposite of 2021, with more homeowners than renters moving out in a year, the only time in a decade. The typical tenant is also not inclined to leave. Where tenants move to one of the 10 border areas with London. Tandridge topped the list with 52% of renters.
However, renters leaving the capital still tend to move farther than homeowners, with 38% heading to the Midlands or the north of England, up from 27% in 2019, and more than 13% of homeowners moving into the same place.
The Corona epidemic and the switch to telecommuting have led to a decrease in the number of tenants in London who leave the capital to work.
Only 22% of those who dropped out of school in 2022 left for work-related reasons, compared to 32% five years earlier.
And laggards are increasingly keeping their jobs in the capital, working remotely or returning from time to time. Instead, tenants are leaving for higher rents and renting larger houses in prettier neighborhoods.
The laggards disproportionately come from the less affluent areas of the capital. More than two-thirds of the tenants who left London, 68%, came from the most disadvantaged areas (50%), and this figure has risen steadily over the past decade.
Even though they traded to live in a more affluent area, they were still able to move into a house that was 28% cheaper than the one they lived in before compared to last year.
With this rate of growth, January 2023 was the sixth largest month of annual rent growth since the Hamptons Rent Index began in January 2014.
Rents rose strongly across the country, but both the Midlands and the North of England saw double-digit increases of 11.2% and 11% respectively, on previous increases in single digits.
Growth in London eased slightly to 9.1% as domestic rents in London continued to catch up to pre-corona levels, slowing overall growth across the capital as a whole. Bedroom houses grew faster than large houses.
Both one and two bedroom homes recorded faster annual growth in January 2023 than in any other month since rent indexation began.
Back in November 2021, the average rent for a 4-room apartment was 126% higher than the average rent for a 1-room apartment.
However, this gap has narrowed since then, thanks to an 11.3% increase in the average rent for a one-bedroom apartment over the past 12 months, compared to 2.7% for a four-bedroom apartment.
As a result, the average 4-bedroom home costs 108% more than the average 1-bedroom home as of January 2023, and still slightly above the long-term average of around 100%.
Source: Daily Mail
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