In the wake of the global financial crisis, the housing market in the UK has been at the centre of an unprecedented housing boom in the capital.
London’s rental vacancy rate fell to 2.6 per cent in May, down from 3.1 per cent a year earlier, according to a survey released by the London and Region Association of Realtors.
But, even that rate is down from an annual peak of 4.4 per cent at the height of the bubble in 2008, when London’s population hit 5 million.
The boom has also seen a massive influx of money from overseas investors, who are also investing in property.
The UK government has announced an unprecedented £2.6 billion (US$3.2 billion) boost for the country’s rental sector, bringing the total to £9.9 billion ($14.6 trillion).
It has also been the target of a global crackdown on speculation, with the country set to become the first in the world to impose capital controls on foreign buyers and sellers.
London Mayor Sadiq Khan has said it is crucial that the city’s rental market remains strong, in light of Brexit.
“I want Londoners to have the same access to affordable homes and affordable rents as everyone else,” Khan said in an interview with the Times.
“If you look at the national housing stock in the city, it’s not a very large number, it is very, very low.”
The number of rental units has also fallen significantly since the bubble burst.
In the past year, the number of housing units in London has fallen by more than 20 per cent, according the London Planning Association.
The housing market is also increasingly reliant on foreign investors, with more than $1 trillion (US $2.5 trillion) invested in London property, the London Business School estimates.
The influx of overseas money, and speculation that can result from this, has had a detrimental effect on the property market.
The Economist reported that foreign investment in London properties has risen by 80 per cent since 2016, and has helped to push up the cost of renting in the country.
“We’ve got a very big problem in the rental sector,” Richard Tootell, a housing economist at City University London, told the Times last month.
I think we are in a period where there is a big debate about whether or not Londoners should be allowed to rent in the first place.””
It’s a really bad situation.
I think we are in a period where there is a big debate about whether or not Londoners should be allowed to rent in the first place.”