Young people in London are facing a growing affordability crisis, new research has shown, with the commuter belt expanding to the east.
Findings from the study show many Londoners are moving further afield to reduce their rent burden, possibly while they save for a house of their own.
Less affordable areas in London’s commuter belt, those with higher average rents and particularly those in the South East, have seen less demand and therefore slower rental growth.
Conversely eight out of ten counties in the East of England have seen rents rise by more than two per cent over the past 12 months, highlighting growing demand.
TFL recently revealed that Southern Rail trains are now the most overcrowded in the country, with some services carrying more than twice the passengers they were designed for, while figures this week suggested that more young people than ever, especially in London, are frustrated by the struggle to save, and now feel they will never find their way onto the property ladder.
Elsewhere, already expensive areas surrounding the capital have seen far less rental growth. For someone in Windsor or Maidenhead, traditionally deemed as ‘desirable’ regions for commuters, rents have seen the biggest slowdown.
Annual UK rental growth slowed to 0.64 per cent in July 2017, less than half of the rate of 1.86 per cent seen at the end of July 2016.
Outside of London, the pace slowed to 1.56 per cent, with average rents reaching £756. Within the capital, especially central London, the rents have now been falling for over a year, by -1.05 per cent over the past 12 months.
John Goodall, CEO and founder of Landbay said: “Young people working in London are wrestling with rising inflation on the one hand, and rock-bottom interest rates on the other, so it’s hardly a surprise that people are tackling longer commutes to reduce their rent burden while they save for a deposit on a house of their own.
“Naturally these surrounding areas are starting to experience a surge in rental prices, creating a ripple effect out from the capital. There are of course a number of factors at play, but it’s telling that already expensive areas surrounding the capital have seen far less rental growth, than much more affordable ones.”
Rental Index by county in the East and South East
|Region||County||YoY %||Av. £|
|East England||Southend on Sea||1.78%||746|
|South East||Bracknell Forest||-0.15%||942|
|South East||Brighton and Hove||1.29%||1,073|
|South East||East Sussex||1.92%||775|
|South East||Isle of Wight||1.39%||569|
|South East||Milton Keynes||1.48%||933|
|South East||West Berkshire||1.22%||895|
|South East||West Sussex||2.03%||939|
|South East||Windsor and Maidenhead||-0.23%||1,270|