Are young people being priced out of London property?

More and more young people are being priced out of London’s property market, struggling to afford rent, let alone save for a deposit.

For many, the idea of owning a home in the capital now feels completely out of reach.

The real cost of living in London

For young Londoners, the numbers are increasingly hard to ignore. Average private rents in the capital hit £2,235 per month in early 2025, according to the Office for National Statistics. That’s nearly 10% higher than the year before and comes on top of food, travel and utility bills that are also creeping upwards.

House prices aren’t helping either. Even though London saw the slowest growth in property prices across the UK this year, the average home still costs over £529,000. That’s nearly double the UK average, and far beyond what most twenty-somethings can afford.

Low-income Londoners aged 25 to 29 are now spending around 77% of their wages on housing (Inside Housing). That’s more than twice what’s typical for their peers elsewhere in the UK. It’s no surprise, then, that many young people are rethinking their future in the capital.

Why young people are leaving London

Faced with rising costs and little hope of buying, many young Londoners are choosing to leave altogether. Some are moving to commuter towns where housing is cheaper, while others are going further afield or moving back in with family to save money.

Housing associations have warned of a “generation exodus” and say they’re hearing from young tenants who want to stay in the city but simply can’t afford to. There’s not enough social housing available, rents are soaring, and private ownership feels like a pipe dream.

Bloomberg reported that in September 2023, rents in the city had risen 16% year-on-year, with only one rental available for every six people looking. Even those in relatively well-paid jobs were giving up on trying to make it work in London.

The wider impact on the city

This shift isn’t just affecting young people. London itself is starting to feel the impact. With more families leaving, some schools in the capital are closing or merging due to falling pupil numbers. The public sector is struggling to recruit and retain staff, and there are concerns about what the future holds for the city’s economy.

The London Assembly’s housing committee found that just 26% of young people in the city own a home with a mortgage, compared to 36% of young people outside London. Their recent public survey drew over 450 responses, showing just how much this issue resonates.

Are the current schemes helping?

There are some government-backed schemes designed to help first-time buyers, but many young people say they aren’t fit for purpose in London. The Lifetime ISA, for example, has a £450,000 limit – but with average house prices well over £500,000, it excludes many properties in the capital.

Affordable housing options like the London Living Rent are also falling short. Demand far outstrips supply, and young people often find themselves battling dozens of other applicants for just one or two available flats.

Getting creative to make ends meet

With traditional routes to homeownership looking bleak, many young Londoners are turning to side hustles and digital income streams to try and bridge the gap. From freelancing and tutoring to online selling and remote customer service roles, earning an extra £500 or more a month has become a realistic goal for those who use platforms like Prograd to find ways to make money online.

This extra income might not be enough to buy a house tomorrow, but it can make a real difference. Whether it goes towards rent, bills or slowly building up a deposit, it’s helping people stay afloat and hold onto some version of life in the city.

What needs to change?

Housing associations and the London Assembly are calling for big changes. That includes more funding for social and affordable housing, better access to schemes like the LISA, and a rethink of how homes are built and allocated in the capital.

The committee has urged the Mayor of London to push the government for updates to housing support schemes, publish more data on why young people are leaving, and take serious steps to build more affordable homes through the Affordable Homes Programme.

Making London property more affordable

The message from young people is loud and clear. They want to stay in London, they want to contribute to the city, and they want a chance at a stable future. But without bold action on housing, many won’t be able to. For now, side hustles and second jobs are helping some stay afloat, but real change will only come when the capital is once again a place where young people can build a life, not just survive.