Bed in kitchen, toilet turns study room: Londoners fight for flats in hot rental market

LONDON – Finding a rental property in London can feel like an impossible quest, with prices surging as demand vastly outpaces the number of available units.

People are returning to the city for in-person work and school, while the recent jump in mortgage rates has made things worse by keeping potential homebuyers in the rental market. As a result, the number of prospective tenants has more than tripled from early 2021 levels, according to data from real estate site SpareRoom.

At the same time, long-term tenants are staying put and locking in their contracts to avoid being hit by rent increases. The number of new properties available to rent fell 9 per cent in October from a year earlier, according to property site Rightmove.

The result: More than seven people are actively looking for every one property listed, SpareRoom data show, resulting in bidding wars and exorbitant landlord demands. Those who are lucky enough to find a flat will have to pay up: Average rents jumped 16 per cent in October from a year earlier to £2,420 (S$3,967) per month, according to Rightmove.

“It’s a real challenge for renters at the moment, as there are simply not enough homes available,” said Mr Tim Bannister, director of property science at Rightmove.

Charming the landlord

Ms Ana Oppenheim, 28, asked to view over a hundred properties, spent countless hours calling agents, and put in dozens of offers without even seeing the rooms before she finally found a place to live. 

Evicted by her landlord in September from a £760-a-month bedroom in a house share, she spent a month sleeping on a friend’s couch before finding a room for £550 in New Cross, southeast London. The catch: She is sharing a double bed with her best friend, who was also kicked out of their previous home.

It was a tough search. Ms Oppenheim would offer £200 extra on monthly rent and get outbid by people offering £500. Sometimes she was asked to submit a cover letter. She would compete with about 30 people at open houses and try to make jokes to “charm” the landlord. Her choices were slim: One flat she saw had a bed in the kitchen. Another had a toilet that doubled as a study room.

“I’ve rented in London for 10 years and it’s never been like this,” she said. “It’s degrading.”

One of the main drivers of the tight rental market is surging mortgage rates, which hit a 14-year high of 6.53 per cent last month. Typical first-time buyers are now spending close to half their wages to secure a home, according to Nationwide Building Society, up from about one-third at the start of the year. Mortgage approvals dropped 10 per cent in September from the previous month, according to the Bank of England. 

As a result, would-be first-time buyers are not exiting the rental market, reducing the available inventory of flats.

Outrageous prices

Ms Jess Espin, 29, was forced to leave her £525 room in a four-bedroom flat in west London in October after her landlord increased the overall rent by nearly 50 per cent. Finding a one-bedroom flat with her boyfriend after two months of searching, she is now paying 40 per cent more than before to cover her share of the monthly rent.

The advertising professional from Bristol recalls the house search as a horrendous experience. Agents were not answering calls. Landlords cancelled viewings at the last minute, even though she had taken time off work. Several people would show up to viewings and make offers on the spot. She could not compete with the prices. Eventually she got a lease because she had previously interacted with the landlady and made a good impression. Still, the new rent stretches her budget to the max.

“Prices are outrageous in London right now,” she said. “We’re spending a lot more on rent and have little left of our disposable incomes.”

As people compete for rooms, it is becoming more common to see bidding wars and extravagant demands from landlords, such as asking for six months’ rent upfront, real estate agents say.

Mr Tim Hassell, managing director at real estate firm Draker Lettings, said his firm now gets 30 to 40 enquiries within two days of putting a property online, up from five to 10 before.

“Within a few hours of a property going live, we are receiving dozens of enquiries, which, when compared to the pre-Covid market, is extreme,” he said. 

Waiting game

For prospective renters like Mr Zuhaili Asy-Syakur Marican, rising competition and prices mean learning to be patient. 

The 29-year-old consultant moved from Singapore to London in November and decided to rent an Airbnb until he could find a room in a house share for £1,200 or less. 

After sending about 30 enquiries over a month to potential roommates and agents and receiving only six replies, Mr Marican was also disappointed to find that the flats he viewed looked nothing like the pictures. 

To get an answer on the various Facebook housing groups he subscribes to, the young man was told it would help to share a picture of himself and details about his personality. 

“The competition is really intense,” he said. “Apparently it’s a popularity contest.” BLOOMBERG