Struggling London renters warned ‘people are going to have to move out’

People struggling to find rental properties in London will need to move further out, the boss of the capital’s biggest estate agent has warned.

Foxtons chief executive Guy Gittins told the BBC’s Today programme that the situation in the capital was so “dramatic” it meant people would need to compromise on location.

“We absolutely don’t welcome this but people are going to have to move,” he said.

He added that people who are being priced out will “have to compromise on the property type or location”.

Mr Gittins blamed a mismatch between supply and demand for driving renters out of London, rather than rising rents.

“The main issue is not affordability for the majority of the market - it’s the stock issue,” he said, adding that former prime minister Liz Truss’s mini-budget last September had created “unhealthy” challenges with supply and demand.

He also predicted the shortage in the market would continue for the next two to three years.

His warning comes as Halifax revealed that said property values had fallen on average since last February.

The mortgage lender said values were down by £8,000 overall from their August peak, and added that annual price growth remained frozen at 2.1 per cent for the third consecutive month. The average UK house price in February was £285,476.

Kim Kinnaird, director at Halifax Mortgages, said: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.

“Still, with the cost of a home down on a quarterly basis (by 2.5 per cent), the underlying activity continues to indicate a general downward trend.

“In cash terms, house prices are down around £8,500 (2.9 per cent) on the August 2022 peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels, meaning most sellers will retain price gains made during the pandemic.

“With average house prices remaining high, housing affordability will continue to feel challenging for many buyers.”