3rd July 2019

London Living - Is Residential Next?


There is little doubt that London is one of the most exciting cities in the world. But how we work, rest and play in this metropolis is evolving rapidly.

This is the first one looking at the need for a disrupter in the residential market.

Both the retail and office markets have been hit by disrupters, the impact has been different, but the forces the same. Disrupters aim to use technology to improve user experience to create more efficient, flexible products and services with greater amenity and choice. In retail markets, this has manifest itself in the rapid, universal growth of online retailing. In offices, the effect is most obvious of course in the rise of the co-working sector. Market disrupters have emerged in the residential estate agency market, but this has not reached accommodation and developers yet. So when and how will the residential market be impacted?

London landlords have been in a lucky position over the last 30 years, with little effort or continued investment, rental levels have increased significantly because of the constant high demand for rental properties. It is common knowledge that London is an expensive city to live in – young professionals are most impacted, spending on average 50% of their monthly income on rent. I am sure you wouldn’t be surprised to hear that it takes on average 8 years to save for a deposit today. Londoners are increasingly choosing to rent in the long term rather than buy, although there is more to that decision than just finances.

These high rents are becoming the norm, which you could argue is acceptable in the open market if tenants are prepared to pay. However, there is a lack of regulation or fairness, Londoners are paying a high proportion of their salary to live in converted Victorian townhouses. The stock is increasingly becoming mismatched with the desires of London renters. Tenants are dealing with individual, inexperienced landlords who are slow to react to repairs and maintenance, leaving the tenant under stress and paying over the odds for the accommodation.

The demand for flats and shared houses is so high that there is no pressure for change. The current stock is insufficient and does not meet the desires of single people in London. However, there is no motivation for private Landlords because they are still able to achieve high rents quickly on their flats or shared houses. The market needs a large disrupter, the likes of Netflix to Blockbuster to increase the competition – this would pressurise Landlords to invest in their houses and to swing the market in favour of tenants.

Jessica Mueller


LondonLiving is a weekly thought piece looking at different aspects of life in the capital; from the logistics of deliveries, the plight of loneliness, through to how generation rent is shaping its future. 

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