The number of properties available for private rent in London is shrinking, even though the demand for rental homes continues to grow. This troubling trend has been highlighted by the National Residential Landlords Association (NRLA), which is now urging the government to take swift action.
Without significant steps to improve the situation, the NRLA warns that renters will face even fewer housing options in the near future. The gap between supply and demand is already large, and if nothing is done, it could grow even wider.
Government data shows that the number of private rented homes in London dropped by six per cent between 2023 and 2024. This marks a notable decline in housing stock at a time when more people are turning to the private rental market.
An independent analysis for London Councils and Trust for London revealed that this decrease is happening fastest in the capital’s more affordable boroughs. This means people with lower incomes are most affected by the housing shortage.
Despite the fall in available homes, the demand for rentals in London remains extremely high. According to property website Rightmove, each rental property in the capital receives interest from an average of eight potential tenants.
The pressure on the rental market is only expected to continue. Waiting lists for social housing in London have reached a 10-year high, leaving many people with no choice but to rely on the private rental sector.
Adding to the challenge, London is the only region in the UK where the number of first-time buyers has actually fallen over the past decade. According to data from Halifax, this highlights how difficult it has become for many to step onto the property ladder.
This growing mismatch between supply and demand is having a major impact on affordability. Rents are rising rapidly, and tenants – especially those on lower incomes – are finding it harder to secure suitable and stable housing.
Research for London Councils and Trust for London found that just five per cent of private rented homes in the capital are affordable for people claiming housing benefits. This means many renters are left with very few viable options.
Because there are so few alternatives, tenants often feel unable to speak up about poor living conditions or unfair treatment. This lack of choice makes it harder for them to hold irresponsible or criminal landlords to account.
The NRLA stresses that increasing the number of homes for social rent and boosting opportunities for homeownership are both essential. However, it also says that without more high-quality private rental properties, London’s housing crisis cannot be solved.
The association is calling for a range of solutions, including tax changes to encourage investment in rental homes. For instance, removing the five per cent stamp duty surcharge on homes rented out after being brought back into use could be a helpful step.
Another concern is the speed of the legal system. With the government planning to scrap Section 21 “no fault” evictions, landlords need confidence that legitimate possession cases – such as those involving rent arrears or anti-social behaviour – will be handled quickly.
Official figures show that it currently takes more than six months for a legitimate possession claim to move through the courts. These long delays not only impact landlords, but also affect neighbours and other tenants who may be experiencing difficult situations.
The NRLA is also pushing for a government-backed financial package to support energy efficiency improvements in rental homes. With new energy standards on the horizon, landlords need help to upgrade properties in an affordable and timely way.
Ben Beadle, Chief Executive of the NRLA, said: “Private renters across London are facing the full force of the housing crisis. The shortage of homes to rent is a one-way street towards higher rents and less choice. We need more of all types of housing in the capital, including quality homes for rent. Now is the time for policies that support the homes renters urgently need.”
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