You may have seen recent hand-wringing reports that London’s population is set to decline for the first time since 1988. About 700,000 residents have permanently left the city since the pandemic began a year ago, in search of a garden, a quieter lifestyle and closer proximity to family.
Most of the concern has centred around what this means for the London rental market, worth an eye watering £1.5 trillion [1]. Prices have dropped. The average rent has fallen by 6.9% [2] and there is uncertainty as to whether this is temporary blip or if it is symptomatic of a larger problem that the pandemic has only just brought to light. There has also been a raft of buy-to-let properties being put on the market and a sharp decline in buy-to-let mortgages being taken out by prospective landlords.
Explaining why he sold, Philip Cooper, a landlord, said “The mortgage costs had gone up, the tenants were more demanding… you would be mad to get into buy-to-let in London today” [3]. Renting in London is notoriously painful. Who doesn’t have a story of a dodgy landlord refusing to fix that patch of suspicious mould or to look at the boiler that is clearly broken. Why should renters not make demands on the people who are taking an average of 40% of their income? [4]. Landlords have also complained that their tax breaks have been reduced. Why won’t anyone think about the high-rate taxpayers like Mr. Cooper? In a pandemic instigated recession, it is hard to feel sorry for those in a high enough income bracket that they pay 45% of rental income on tax [5].
Further complaints have been made that landlords cannot sell properties with cladding before it has been fixed. Given the potentially life-threatening risk this poses, it does not seem like so much of a burden to wait to sell until the property is no longer (essentially) inhospitable.
If all of this has brought a tear to your eye, I would suggest looking at the bright side. This presents an opportunity for London renters to negotiate a (long overdue) reduction in rent. One housing market analysis says that though landlords are negatively affected by the rental price drop, “it could actually be what London needs over a longer-term perspective, if it leads to London becoming more affordable and more attractive to young people again.” After all, isn’t that what London is really about? Young people have been squeezed out of the capital for years by landlords charging extortionate prices on multiple properties often purchased for capital gain. If you are one of the Londoners who has decided to stay and stick it out, here are some tips for negotiating a rent reduction.
1. Research your local market to find how similar properties in your area are priced. Ask your landlord to match the rent or ask for a reduction on this basis.
2. If you’re experiencing financial hardship because of the pandemic – say so! Landlords have been told by the government to offer support to tenants. More details on this can be found on Shelter England’s website (an invaluable source for all renters).
3. Be specific about how much rent you want reduced. Be clear about what you expect and be honest and polite in your dealings. No one is going to give a discount to someone being rude and unreasonable.
Hopefully the market will remain favourable for renters and that this will be the start of a long-term shift away from how London’s housing market allows renters to be exploited. Happy negotiating!
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