London is becoming a private renting city – again

by Dave Hill

Sadiq Khan’s draft London Housing Strategy is expected to be published next month and I’ve been looking at the evidence it will draw from. There are over 100 pages of fascinating facts in there, some which we might return to another day. But there’s one overarching story that jumps out straight away, illustrated by a simple graph.

It won’t be news to London housing wonks and nerds or bring much comfort to discouraged would-be first-time buyers or some of London’s worst housed people. But it still might surprise some to learn that the recent rise in the percentage of Londoners who rent from private landlords can just as easily be seen as a return to normality as a symptom of a crisis. Here’s that graph:

As you can see, it shows the proportions of London households housed in the three principal tenure types – owner occupied, private rented (PRS) and social rented – since 1961, how they have changed and how they are projected to change further by 2025. The yellow line shows that 46% of London households were in the PRS at the start of the period, fell to just 14% in 1991 and is now recovering strongly. It now looks on course to climb back to 40% in less than ten years’ time.

The figures for owner occupation follow pretty much an opposite trend. There were fewer owner occupiers than private renters in 1961, but they soon forged ahead and peaked in the high 50s at the same time as the PRS hit bottom. But since the early 1990 the paths of the two tenures have been converging again and are on course to cross back over when a quarter of this century has passed. Meanwhile, the proportion of Londoners in social rented homes has risen from less than 20% in 1961 to 35% by 1981 before gradually eroding to a little over 20% today. Private renting in London is beginning to look like the new normal. But it is also the old normal too.

These “tenure split” data and the graph are on page 10 of the evidence base. See them and the full document by clicking “Housing-in-london-2017-report” via here.

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