A decade on, is there any low-cost living in London?

In spring 2014, EG teamed up with Tim Lowe, then a 26-year-old graduate surveyor at Knight Frank, as he took on a challenge to live within London’s Zone 2 on a £500-per-month budget, including bills. Here we look at the ways Lowe lived within that budget and ask if London’s rental affordability has improved. A decade has passed since I undertook a living experiment to test the boundaries of affordability in the London rental market. In March 2014, as a graduate surveyor at Knight Frank, I spent four months renting seven different types of accommodation at around £500 per month, varying from a canal boat to a disused office, an HMO and, at one point, a horsebox parked in a car park a five-minute walk the office where I worked (a fantastic commute if nothing else). The aim was to explore the scope of truly affordable rental options for young workers in London or, as they had been dubbed at the time, “Generation Rent”. My conclusion in 2014 was that the market was highly challenging for those on lower salaries, with very few truly affordable and liveable options available. This realisation, and my experience living as a property guardian during the investigation, served as the foundation for setting up the Lowe Group to provide cost-effective living space to those affected by such market conditions. But what of affordability now? Ten years on, the landscape appears to be worse. Generation Rent should have been a once-in-a-generation issue, but affordable renting is now an even greater challenge for Generation Z as they enter the workforce, exacerbated by the fact that many of those trapped renting a decade ago remain no closer to getting on to the property ladder. Confluence of factors A key issue in March 2014, as the economy emerged from the global financial crisis, was the inability of first-time buyers to save towards a deposit, putting upwards pressure on rental demand in London. Ten years on, rather than this problem being resolved, a confluence of factors is putting rental affordability under greater strain than ever. Chief among these factors is that wages in the capital simply haven’t kept pace with sales and rental prices. The most recent ONS data found private rents in London had increased by 6.9% in the 12 months to January 2024, up from 6.8% growth in the previous year, while wage growth in real terms for December (adjusted for inflation) saw an annual increase of just 1.4% for total pay. Based on those ONS figures, a recent report found that a typical first-time buyer in London would have to save for 31 years to raise a deposit on a home. Reputation at risk My concern is that, whereas in 2014 the lack of reasonably priced renting options felt like an acute housing market issue, rental affordability has now grown into a chronic deep-rooted problem that threatens London’s position as a leading world city. The city is celebrated for its vibrant creative sectors and diverse population, but now faces the risk of becoming affordable only to the wealthiest. The creative industries, historically reliant on new talent and diverse perspectives, are particularly vulnerable if we cannot accommodate the next generation of young artists, performers and creatives, who contribute so much to London’s reputation as a global artistic hub. In addition, the impact on key workers cannot be overstated. Nurses, teachers and other essential employees find themselves priced out of the communities they serve. Cleaners, hotel staff and maintenance workers are being priced further and further away from their places of work. This not only affects their quality of life but also poses a challenge to the sustainability of vital public services. London’s private sector and wider business world should also not be considered immune from a potential talent drain. This topic was brought home to me recently when a younger staff member left their role at the Lowe Group as they could no longer justify making a home in London due to overall costs of living and decided to leave the city altogether. I could well understand this summer’s graduates thinking twice about accepting entry-level employment in London and seeking options elsewhere unless they have significant financial support. Affordability squeeze Since 2014, the housing market has evolved to serve up new solutions that were not as prevalent when I carried out my investigation. However, on reflection, these initiatives have looked to capitalise on Generation Rent rather than resolve the issue of affordability. The rise of build-to-rent and latterly co-living has increased supply and choice at the premium end of the rental market with few positive benefits at the lower end of the spectrum. In the wider new-build sector, the overall pace of construction has failed to keep up with demand, particularly for affordable homes, which are vital in providing first-time buyers with a route out of the rental market. The significant shortfall in new homes being built is leaving many boroughs with a challenge to meet population growth, demand and household formation rates. We see the affordability squeeze on the ground each day in conversations we have with Lowe Group licensees – indeed, our list of applicants to be a property guardian has never been higher. In 2014, I saw in property guardianship an opportunity to work alongside owners and operators of vacant properties to provide well-maintained affordable living spaces to responsible renters who were finding themselves priced out. Today this continues to be a fantastic option for those seeking meanwhile space in London. We are constantly striving as a business to locate new vacant properties, but even if we could offer affordable accommodation to every person on our waiting list this still wouldn’t make a dent in the fundamental issues London faces. Policymakers in parliament, the Greater London Authority and those at a local level need to recognise that the affordability issue that has grown over the past decade poses a serious threat to London’s future as a major world city. It requires an equally serious response. If we cannot affordably accommodate the key workers, creatives, support staff and young talent who underpin the city, then its future prosperity will be eroded. We need collaboration between authorities and real estate to genuinely prioritise affordable living options. This could be done by unlocking more disused space and brownfield land for residential development and ring-fencing it for affordable housing with incentives for development. Many barriers – structural and financial – could be lowered for this purpose, such as reducing section 106 requirements and fast-tracked planning consents. This approach would go a long way towards improving London’s future. I’m sure as I experienced the delights of a houseboat and horsebox in March 2014, my younger self would have assumed the affordable rental market would be a lot rosier 10 years down the line. It isn’t. But with true political will, collaboration and a desire to keep London great, we can make the next 10 years better. Affordable housing is not a burden but an investment in the city’s future. Seven different abodes in five months, all for around £500 per month, including bills. This is the challenge Tim Lowe took on in 2014. Here we remind ourselves of the experiment – which sadly, as the above words show, has failed to generate change in London’s rental affordability dilemma: Lowe Cost Living: Gospel according to Tim Lowe Cost Living: Comfort zone in Camden Lowe-cost living: canalside Lowe-cost living: my time as a cubist The Lowe-down: comfort on the South Bank Lowe Cost Living: horse play