Renters in London have been left behind as homeowners have benefited from far more space in which to live, says an authoritative new report.
The average floorspace per person in the capital has risen by nearly 30% over two decades, according to the study by Centre for London.
But nearly all of this extra living space has gone to homeowners, and very little to private renters.
So London’s housing policy, rather than improving lives across society, is a key factor in a “harshly unequal city,’ the report concluded, with many families and individuals living in homes in dismal conditions.
Many young professionals are now paying more than £1,000 a month to rent a room in a shared house or flat, with many less well off people seeing an even bigger share of their take-home pay eaten up by rent.
Antonia Jennings, chief executive at Centre for London, told The Standard: “Private renters are paying extortionate prices to live in small, overcrowded, and often poor-quality homes, with issues like damp and mould left unresolved for years.
“Meanwhile, thousands of Londoners are sleeping rough on our streets.”
Criticising the capital’s ‘winner take all’ housing system, Ms Jennings highlighted its “stark paradox” as she called for major reforms.
“Across London, many large, family-sized homes are now significantly under-occupied,” she explained.
“Bedrooms are left empty because we do not adequately incentivise Londoners to live in homes that are the right size for them.”
Disincentives, such as Stamp Duty, were deterring people from downsizing which meant housing inequality was being “locked” in place.
“Homeowners retain and gain more space, security and stability,” she added.
“In contrast, families in temporary accommodation, private renters and young Londoners lose out.”
The rise in living floor space per person in the city, partly due to smaller households, was found to be 30% between 2004 and 2023, even with a growing population.
“But these gains accrued almost exclusively to a diminishing number of owner-occupier households who have seen average floorspace per dwelling rise by 33%, compared to just 9% for private renters” the Delivering the Homes London Needs research stressed.
It assessed that this amounted to an 88% increase in housing consumption inequality between the average private renter and average owner-occupier.
There are also significantly fewer social homes, which tend to have limited living space per person.
The richest fifth of households saw average floorspace rise by 27%, while the poorest 40% saw average dwelling space rise by only 6%.
This has widened the gap in average dwelling size between poorest and richest quintiles by 66% from 30 square metres to 50sqm.
The report also highlighted how average house prices have risen from around seven times median earnings in 2002 to 12 times median earnings in 2024, so nearly doubling over two decades.
With far bigger mortgages needed, the capital’s housing tenure mix has changed, with the proportion of London households who are owner occupiers falling from 57% in 1991 to 47% in 2021.
Over the same period, private renter households increased from 14% to 30%.
“This in turn has seen housing costs become a major driver of poverty, with the rents taking up an average of 42% of renter take-home (pay) over the last five years,” the study added.
There were more than 75,000 households living in temporary accommodation in London, as of last autumn, of which 50,000 were with children.
Around 13,000 people were sleeping rough in London between April 2024 and March 2025, a 10% year-on-year rise and the highest number recorded, according to the report.
It added that there were 340,000 people waiting for social housing and 2.36 million in “after housing costs” poverty.
London Mayor Sir Sadiq Khan has been criticised by political opponents over London’s housing crisis.
He and the Government have cut the number of affordable homes required in some housing developments to try to kick start home building in the capital.
But the report warned that an extra million new homes would have been needed to have been built for prices to have risen by 30% less than they did in London between 2002 and 2024 and affordability to be more in line with the national average.
It also stressed that even if more homes could be built, the housing crisis would continue for many people unless the property divide between renters and homeowners is tackled.
Centre for London is going to lay out more on proposed reforms to London’s housing system later in the year.
