With the capital’s rents still on the increase, albeit it at a slower rate, many young Londoners — especially those who are single — struggle to afford their monthly outgoings, let alone save anything towards a deposit.
Scientific affairs manager Francesca Frattini, 35, however managed to put away £700 a month while living in a new-build, one-bedroom flat at L&Q at the Sugar Works, a short walk from Pontoon Dock DLR. The flat came with a concierge, open-plan kitchen-living room, access to a gym and swimming pool, plus a balcony.
“In 2022, I paid £950 a month,” she says. “The rent on the open market for the same flat would have been about £1,700/£1,800 a month when I moved in, even a studio was £1,100. I wouldn’t have been able to afford it. Now the LLR rent for my flat is £1,177 a month but the private flats are £1,950 to £2,000 and a studio is £1,600. It’s crazy.”
Frattini’s bargain rent was because she’d been accepted onto the London Living Rent scheme, after originally renting with Intermediate Market Rent.
“It’s not advertised much. It was only because of a friend that I found out about it. You get a discounted rent of about 20 per cent less than market rent on both schemes, but with LLR you can buy the flat you live in.”
Funded by the Mayor of London, LLR is a government-backed scheme which enables eligible tenants to increase their savings by offering a discounted rent. LLR prioritises those living and working in the same borough and there are different salary criteria depending on the development, property and local area.
You also can’t already own a property, need a good rental history, have a right to rent in the UK, no history of bankruptcy and a good credit score.
“Unfortunately, the LLR scheme doesn’t appear to be as well-known as it should be. It’s a solid option for many Londoners, yet it’s being overlooked because it simply doesn’t get the same attention as other schemes. With better promotion, more people could benefit from it,” says Sarah Walker, a property expert from Richmond.
For the L&Q development where Frattini rented, the minimum salary was £36,000 and the maximum was £67,000.
“It’s a solid option for many Londoners, yet it’s being overlooked.”
“Affordability is assessed to ensure rent and financial commitments don’t exceed 40-45 per cent of your net income. Tenancies typically range from three to 10 years, with rents capped at £1,400 per month,” says Walker, who also flags that should your income exceed the maximum allowed, you may no longer be eligible for the scheme. “If your circumstances change, transitioning out of the scheme can be tricky, possibly requiring you to pay market rent or move out.”
Rents also go up annually in line with inflation — for Frattini this meant hers increased by 11 per cent during her tenancy. “This is still less than what private landlords were putting their rents up to.”
One of the main issues with LLR is the perceived complexity of the application. “Potential applicants might find the process of applying and securing an LLR property to be complex or daunting, especially if they are not familiar with affordable housing schemes,” says property specialist Paul Gibbens.
The two-stage application which Frattini undertook involved sending a number of documents, including a current tenancy agreement, a credit check from Experian, utility bills, three months of bank statements, three months of work payslips, Right to Rent documentation, a copy of a passport and a reference and contract from an employer.
“It’s half an hour of research for you to put the documents together and then you’re saving £700 a month.”
“You need to make some effort,” says Frattini. “It requires a lot of documents but it’s not like it takes two days. It’s half an hour of research for you to put the documents together and then you’re saving £700 a month.” She started her application in May 2022 and moved into her flat in August 2022.
Once you’re accepted on the scheme, Frattini said it was pretty easy, although she did have to do some chasing. Not everyone is so lucky, however.
“There is no official cap on the number of applications but, because of the limited supply, not all eligible applicants will secure an LLR property,” says Gibbens. “This can lead to long waiting times or the need to consider alternative housing options.” There is very little information available about the number of properties for rent through LLR but it’s estimated to be around a few thousand.
“Because of the limited supply, not all eligible applicants will secure an LLR property.”
LLR properties are also unevenly spread throughout the capital, so may not always be in your desired location. “They tend to be more concentrated in certain boroughs where local authorities or developers have been more active in delivering affordable housing. Often, these areas are in Zones 3 to 6, where land is more affordable for development compared to central London,” adds Gibbens.
“The success and availability of LLR properties also depend on the participation of developers and housing associations. Changes in government policy, funding or developer incentives could affect the future availability of these properties.”
London Living Rent
Eligibility Criteria
⬤ You must live or work in London
⬤ Either have a formal tenancy (eg, in the private rented sector) or live in an informal arrangement with family or friends as a result of struggling with housing costs
⬤ Have a maximum household income of £67,000
⬤ Not own any other residential home
⬤ Be unable to currently buy a home (including through shared ownership) in your local area
⬤ Have a good credit history
⬤ Have a right to rent in the UK
Charlie Lamdin, house-moving champion and presenter of Moving Home with Charlie, adds: “Properties are most likely coming from stock that developers have had trouble selling on the open market so it’s really pot luck where they will turn up.”
When you’re selected for the scheme, you can then search for available properties on the Homes For Londoners website. To secure a property, you pay one month’s rent up front and a month’s deposit. Part of the LLR application process also involves you filling out what your regular monthly expenses are. This is then used to help calculate a realistic amount that you should save each month.
Properties are most likely coming from stock that developers have had trouble selling on the open market
“They work out a minimum amount you should be saving each month. For me, this was around £300,” says Frattini. In fact, she managed to save £700 a month. “I’m good with myself and I don’t do crazy shopping. I travel because I like holidays and, in 2023, I had laser eye surgery, so I wasn’t just saving, I did live as well.”
Frattini’s budgeting is all the more impressive as Hamptons Research has estimated that it takes people who are single an average of 13 years longer to save for a deposit on a property, compared to couples.
“Single people are often overlooked in the housing market — getting on the ladder on a single income, or even taking on a rental lease solo, can seem almost impossible,” says Andrea Palmer, head of LLR at L&Q. While no one checked that Frattini was putting this money aside, she says other friends on the LLR scheme have had to provide evidence of savings. “You can’t just take it as a lower rent and do whatever you want, you need to take advantage of it. You can maximise your savings and put them towards other things [other than a house deposit], such as another project.”
That said, the aim of the scheme is always to transition tenants into home ownership, either through shared ownership or on the open market, but there’s no guarantee that this will happen after the tenancy ends. “Economic changes, personal financial circumstances, or shifts in the housing market could affect their ability to buy,” says Gibbens.
“I have tried to spread the news because it is a good deal.”
Due to her discounted rent, in the spring of this year, Frattini managed to put down a deposit and buy a £250,000 one-bedroom flat nearby. “My parents gave me 50 per cent of my deposit. I could have put down less deposit and done it myself, but I wanted to get a smaller mortgage and better rate.”
Her new flat is slightly smaller than the one she rented through LLR, but she was able to buy it on the open market, rather than through shared ownership. “One disadvantage of the scheme was that if I’d wanted to buy the flat I was renting, the only way I could do that was through shared ownership as it was a half a million-pound flat.”
She moved in with her two cats, Elsa and Camillo, in April and since then has encouraged people to sign up to the scheme. “I have friends who have sent in their applications and are waiting to hear. I have tried to spread the news because it is a good deal.”
