It has been reported today that London officially has the lowest percentage of homeowners in the whole of the UK, with almost a quarter of the entire population of London now renting properties instead. This is proving to become a problem in some areas of London, where the lack of affordable housing is starting to cause a rich poor divide that is threatening communities.
The Guardian has reported that Hackney in the North East of London has the lowest percentage of mortgage free homeowners in the whole of England and Wales. Furthermore, the recent popularity of Hackney has led to professionals moving to the area, creating higher demand for housing, and therefore raising rent prices substantially. Even one bedroom flats above shops described as ‘character properties’ are being rented out for over two-hundred pounds a week – or can be bought outright for just under two hundred thousand pounds. Grace Santos, whom has seen the recent change in Hackney has said that “before, you could find a house to buy here very easily, but now it is very expensive. Rich people are coming here now because they think it’s posh, but it’s not posh. I don’t know what young people can do, where they will live”.
Help may soon be at hand however with housing groups such as the Hyde Group trying to close the rich/poor divide in London by regenerating run down areas and creating new homes. For example, the Packington estate in Islington, North London has a large amount of new identical homes that can either be bought outright, or be rented by low-income local families for as little as £112 a week. The estate therefore aspires to embody the ideal of the socially mixed community by not out pricing those with low incomes.
The increase in the rich/poor divide will also affect the way that landlords rent their properties in London, especially as many young people are now opting to move out of the city in order to find rental prices that they can afford. Therefore, whilst some areas of London are becoming more popular, others are finding themselves with a large amount of unoccupied housing, which landlords will have to continue to find the money to pay the mortgages for unless they are covered by unoccupied property or landlords insurance.