The German finance minister Olaf Scholz has approved a measure that will freeze rents in the German capital for five years, so that Berlin 'doesn't end up like London' (ouch). While this isn't great news for Berlin's property owners (property shares have dropped, unsurprisingly, when the news was announced), it will be a relief to renters whose living costs continue to rise.
What would a similar rent freeze in London mean for renters in another capital city known for very high – and relentlessly rising – rents? The figures* are impressive. London rents have risen from an average of £1,530 a month to £1,679 – an increase of 2.44 per cent per year. The same rate of rent rises for a further five years would push the average rent in the capital to £1,894 a month.
With a rent freeze, on the other hand, tenants could save a total of £7,260 in rent in five years – money that would surely allow many to put enough together for a deposit and eventually take out a mortgage. And if you live in the borough of Newham, you could be looking at a crazy saving of over £19,000 – rents in the borough have been increasing by a disconcerting £329 a month for the past five years.
It's not just Londoners who would benefit from a freeze or cap on rents for five years. Oxford, which is well known as the most expensive UK town to rent in, has seen rent increases of over seven per cent a month, and renters there could save over £17,000 in the next five years if rents remained static. Bristolians could also benefit from savings of over £14,000 over the same time period.
What the data demonstrates is clear: UK renters haemorrhage vast amounts of money just to have somewhere to live; the money that could be saved and put towards house deposits, allowing these renters to become home owners, is instead spent on constant rent increases. Even if the UK government is not ready for a drastic German-style rent freeze, it is clear that some sort of legislation to prevent excessive rent increases across the UK is desperately needed if Generation Rent isn't to become just the first generation of renters.
*data collected by Ideal Flatmate.