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London house prices might be mind-boggling for renters and young buyers, but it's forcing creative solutions to the problem like never before




Steve Folwell is managing director of LoveSpace.

There are innovative solutions being created to the problems faced by generation rent (Source: Getty)

This month, Daniel Radcliffe reportedly put his New York apartment up for rent at an eye-watering price of $19,000 (£12,500) per month.

But now you can live the real “Harry Potter” lifestyle for a snip of the cost after an eager London renter in search of a new home tweeted a ‘room’ that was available to rent in Clapham for £500 a month. The catch? It’s no more than a cupboard under the stairs.

It’s the problem defining ‘generation rent’ in the UK. Last year, one in five employed young people moved back in to live with their parents, forced into retreat by the high cost of housing, rents and saving for a deposit. It’s causing a headache for young people and their employers – bosses of businesses from John Lewis and Linklaters to Hitachi and Heathrow Airport are calling for action.

At his party conference, David Cameron promised to transform this group from ‘generation rent’ to ‘generation buy’ based in part on a plan for 200,000 affordable ‘starter homes’. But when even this requires a £77,000-a-year salary, can young people ever hope to make their first step on the property ladder?

In today’s market, the reality is that £500 a month doesn’t get you much more in London than a Privet Drive-style bedroom, as space is becoming a commodity with an ever-increasing price tag.

While we can laugh off the advertisement for a cupboard under the stairs, the shortage of affordable housing means that our perception of what is normal has become worryingly skewed. It’s forcing people to reconsider their ideals of space and reevaluate what’s really important and necessary.

I remember the day I moved in with two university mates in Dalston to a £1,000-a-month three-bedroom terrace in 1999. The feeling of independence I felt, as I stood firmly on my own two feet, was completely liberating. This is no longer a conceivable rite of passage for much of this generation.

Moving back home is no one’s first choice but as salaries fail to keep up with inflation rates and the average London rent now hitting £1,500 per month, some have no alternative.

So, what can someone starting out for the first time in London do in order to find somewhere to live when faced with these obstacles?

I’m inspired by the spirit of this new generation of Londoners, many of whom are our customers, who are taking on these old battles in a new way. They have no past to fall back on, and are increasingly rejecting the orthodoxies of ownership, which our politicians continue to pander to. They are creatively adapting their lives to accommodate the current reality of urban living by utilising the digital tools readily available to them.

A simple visual joke about a room for rent can take off on the Twittersphere and capture everyone’s imagination. It’s the same spirit that runs the sharing economy and, in cities across the world, it’s letting people take more control over the space they live in.

Sharing economy companies such as Airbnb, ZipCar and Freecycle offer the much needed flexibility and relief from the constraints of binding financial ties while on-demand services allow their customers to live ever-bigger lives from ever-smaller spaces.

CEBR and London First reported this week that London’s high rental prices are costing the economy £1bn a year in lost consumer cash but the economy is changing; people rely on digital tools to reduce the cost of their lifestyle.

In the future, those digital tools will reduce the demands on space and lower the imperative on up sizing for young renters, first-time buyers, new parents and young families. When thinking about the supply of housing, we need to think about what the future holds for connected homes and private sector innovations in the digital economy which, at a larger scale, could make a great difference to the supply problem.

It may feel to young people as though it’s a punishing existence that awaits them in London, where older generations hog all the spacious homes for themselves, Dursley-like. There is no amount of magic you can weave that will solve the problem for ‘generation rent’.

But in many ways, an independent life is closer at hand now than it ever was. Clever solutions in the private sector and long-term solutions from the public sector will ensure young Londoners continue to have as much fun as anywhere else, and connect better as they do.

They do live a totally different life to their parents, but it is not at all for the worse.

City A.M.'s Opinion pages are a place for thought-provoking opinions and views. These are not necessarily shared by City A.M.

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