Like their counterparts in Canada, Nigerian students and other immigrants in the UK, particularly London, are having disquieting experience with their accommodation needs as rental crisis rocks the country adjudged one of the most mature housing markets in the world.
A realtor in the London property, Guy Gittins, chief executive of Foxtons, has described the situation as “the worst supply and demand balance we have ever seen, and it’s only going to get worse,” recalling that, in April, the agency had 97,000 tenants chasing after just 2,000 available properties.
Another realtor, Richard Donnell, executive director at Zoopla, fears that “rents will continue to rise ahead of incomes unless we see a sustained increase in rental supply or a material weakening in demand, both of which appear unlikely.”.
Besides scarcity of houses to rent, there is also the challenge of spiking interest rate on mortgage which, in the last six to 12 months, has gone up from 0.25 percent to 5.25 percent, according to Yemi Edun, a London-based realtor who spoke to BusinessDay in a telephone interview.
Edun, the CEO of Daniel Ford International—a leading property search and acquisition consultancy, offering an exclusive service for private individuals and property investors in London—told our reporter that the rising interest rate was responsible for the low supply, adding that demand within this period has gone up 20—30 percent.
“Most of our people coming to London are not having it easy; many of them have nowhere to stay and this is because there is no stock. This has been worsened by Bank of England which has increased interest rate on mortgage from 0.25 percent to 5.25 percent, thereby discouraging landlords from building more houses,” he said.
He cited instance of a Nigerian couple who arrived London three weeks ago but have not been able to find accommodation. “They came with two kids; the wife came for studies but the husband cannot get a job because they have no accommodation. The few properties they have seen are asking for a guarantee of 38, 000 Euros per annum. Currently, they are in a hotel accommodation around Albans Hertfordshire which is already telling on them,” Edun said.
This was corroborated by Chioma Amarachi who is also in London for further studies and left Nigeria with her husband and a baby. “Accommodation in London is not only expensive but very hard to find as demand is higher than supply. When you are new in the country, it’s a tug of war because meeting the requirements is very hard,” she said in a response to an interview question by our reporter.
Continuing, she said, “they will ask for things that only if you have stayed in the country for months that you can provide. I can go on and on, but the summary is that it is expensive and difficult to find a house in London metropolis.”
Writing on ‘How long can the UK rental crisis last?’, Joshua Oliver, FT’s property correspondent, notes that rising interest rates have slammed the brakes on the runaway market for UK home sales which contrasts with the rental market that is still red hot.
Newly let properties, according to him, are 25 percent more expensive than before the Covid-19 pandemic hit in 2020, quoting estate agent, Hamptons, which says that rents were still rising at 9 per cent as of May compared with the previous year.
“UK annual rent increases set a new record for 12 consecutive months up to April this year, according to Office for National Statistics data going back to 2016. While the pace of annual rental growth seems to be slowing, tenants will continue to struggle as already unaffordable rents keep rising,” Oliver says.
He illustrated the frustrating rent situation in London with the experience of Dhunya De Silva who, for the third time, tried to move to London, hoping it would be different. After she and her boyfriend had been promoted at work, she thought they might be able to afford to rent in the capital.
The 23-year-old, according to the property correspondent, had previously tried to move from Hertfordshire, just north of the city, first when she started university in London and again after graduating. Both times, the high cost and unappealing homes on offer led her to stay put.
“Even with the extra income from her promotion, the third search has become an ordeal. With dozens of other tenants competing for every listing, the pressure is intense to be first to view a flat and fight it out in a bidding war,” he said.
Oliver quoted De Silva as saying, “it is absolutely insane. Every morning I type in ‘rent in north London’ or ‘rent in east London’ and I look at every property. Last week, it got to the point that I was refreshing it every 15 minutes; it is pretty mind-blowing. It can’t keep going on as it is now.”
“These,” Edun noted, “are the kind of experiences Nigerians are going through and the situation is so dire that everybody is confused and helpless including even realtors with street or native wisdom.
Oliver says there is now growing concern that the supply of rental homes could get even worse as higher mortgage costs hit landlords and make buy-to-let investments less attractive — or, in some cases, economically unviable.
He recalls that, in the past few weeks, many of the UK’s largest lenders, including HSBC, Nationwide and Santander, have raised their mortgage rates, adding to pressure on landlords.