London is grappling with an escalating rental crisis, driven by high net migration and a chronic housing shortage. New analysis by think tank Onward reveals that soaring demand and sluggish homebuilding are making the city even more unaffordable for renters.
Laurence Fredricks, a London resident, shares a common struggle. He and his partner pay nearly £2,000 monthly for a one-bedroom flat in Zone 2. In 2023, they were forced to move three times in search of affordable rent, including one move triggered by a £500 monthly rent hike.
According to Onward’s study, high net migration has been a key driver of rising rents in the capital. Many migrants flock to London for its unmatched economic opportunities, yet housing supply continues to lag behind. The shortage of new homes, coupled with a constant influx of newcomers, intensifies competition for available properties—inevitably pushing rents higher.
Impact of Migration on Rent Costs
Onward’s model estimates that since 2001, high net migration has added an average of £216 per month to London rents—equivalent to nearly £2,600 annually. Elsewhere in England, the rental impact of migration is smaller, estimated at £132 per month.
The ‘Boris Wave’ Effect
Post-2021 immigration policies, referred to as the ‘Boris Wave,’ have also significantly affected rents. These policies, including relaxed student and graduate visas and allowing health and care workers to bring family members, have driven up London rents by an additional £79 per month. That’s £948 a year directly tied to government policy shifts. In comparison, the rest of England saw an annual increase of £576.
Housing Targets Missed Amid Growing Demand
The outlook for London renters may worsen. Despite the city’s acute housing demand, the removal of the 35% urban uplift by the Labour Government will reduce the capital’s housing delivery by around 20,000 homes annually. Without a drastic increase in homebuilding or a reduction in migration levels, rental prices are expected to climb even further.
Public Opinion Split Over Migration
A 2024 Onward survey revealed that 68% of Londoners want lower immigration levels. However, 52 of the 75 constituencies in England supporting higher immigration were located within London, highlighting the complex views among residents.
A Dual Threat to London’s Future
London’s vibrant diversity continues to attract new residents, but its skyrocketing living costs are driving many away. The combination of high net migration and insufficient housing construction poses a serious threat to the city’s future. Without swift policy action to both increase housing supply and manage migration, London risks locking out talent and worsening its rental crisis.
