Housing 

Overcharged Londoners have paid £25 billion too much rent

Sian Berry 4347 Views

Over the past decade, rent rises in London have outpaced wages by more than £25 billion, in what amounts to an overcharged rent crisis.

Our new figures released today show that if rent increases since 2011 had matched wage rises, London’s renters would have paid more than £145 billion in rent between 2012 and 2020. However, the real total is nearly £171 billion – a difference of £25.4 billion. In that time the average rent has gone up from £1,286 per month to £1,623.[1]

At the average house price in the borough, the overcharged total of £25.4 billion could be used today theoretically to purchase every home in Barking and Dagenham.[2]

Today, I am launching a new campaign to push the current Mayor of London to work with other city Mayors whose citizens are also suffering from unaffordable rents to win the power to put in local rent control measures.

WRITE TO THE MAYOR OF LONDON TODAY

London Green Party has also launched a new overcharged rent calculator, which London renters can use to look a their own situation. The average long-term renter has paid an excess premium to their landlords since 2012 of £25,439.

CALCULATE WHAT YOU HAVE BEEN OVERCHARGED

Greens in Bristol are launching a petition to Mayor Marvin Rees this week, with further city initiatives planned.

I say: “As a private renter in London for nearly 25 years, I know the worry and insecurity renters feel from high rents. In fact, I have come close to having to leave London myself due to these pressures.

“The current Mayor made rent controls part of his platform in the election this year, but he must follow up his words with actions aimed at building wide support for these powers to do something about this problem.

“£25 billion is an enormous amount to have paid above the odds to our landlords. In renters’ pockets it would have provided more security, the ability to save and far less worry during the pandemic. Being overcharged one or two hundred pounds a month each really builds up into a serious total.

“How much longer do Londoners have to wait for a Mayor of London who will make reducing rents a national campaigning priority and work cross-party with other Mayors to bring down our living costs?”

Private renter Paul Valentine, an actor who has lived in London for eight years and lives in Lambeth says:

“Finding out I’ve overpaid by over £11,000 is quite staggering. This wasn’t living alone either, I’ve always lived in flat shares, so landlords are gaining far more than that. Working as an actor in London often leads to periods of work uncertainty – needing to claim for Universal Credit and working for lower wages in the hospitality sector. 

“This extra money would have acted as a much-needed cushion against employment uncertainty. The Mayor of London needs to look at this urgently and start to strengthen the rights of renters across London”

Private renter Hunter, based in Camden, who pays 60 per cent of their take-home pay in rent and has lived in London since 2019, says:

“Despite sharing, I have paid more than £3,000 excess rent to my landlords since moving to London. I’m a student so having to pay six months upfront is already tough. Wages definitely haven’t kept up with rising costs and despite only having been here for two and a half years, it’s hard to ignore clear quality of life differences between now and then. Life would certainly be enormously less stressful if there was better control on rent!”

References and data:

1. Data and sources behind the overcharged rent calculator figures are given here.

2. The average house price in Barking and Dagenham in March 2020, was £327,135 (source). £25.4 billion could theoretically buy 77,644 homes at this price. Number of homes in Barking and Dagenham = 77,000
(source: annual dwelling stock estimates by local authority district 2020, table 125, DLUHC)

Map showing % of homes that could be theoretically bought in each borough. Data ranges from 19% in Westminster to 101% in Barking and Dagenham. At least half of homes can be bought in Enfield, Waltham Forest, Hillingdon, Hounslow, Kingston. Sutton, Merton, Greenwich, Bexley, Newham, Havering and Redbridge.