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The steep rise in the cost of London housing has eroded the living standards of new graduates in the capital, sparking a “hutching up” trend with people sharing properties in ever-greater numbers.

Recent graduates are earning less than their counterparts before the crisis while also facing higher rents in the capital, where many have flocked to start their careers. Data from the Higher Education Statistics Agency show 25 per cent of employed graduates who left university in 2008-9 were working in London three years later.

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Graduates who secure a highly sought-after job in central London will struggle to find an affordable room to rent unless they move out to the suburbs and take on a lengthy commute

A Financial Times analysis of median rents data from Hometrack, the property consultancy, shows how unaffordable the city has become for recent graduates, along with many others.

A new graduate on an average starting salary of £22,400 can expect to spend more than a third of their gross income on rent – a standard definition of unaffordability – for a room in a two-bedroom property in 72 per cent of inner London postcodes.

More than half of those postcodes remain unaffordable on this definition even to those renting a room in a shared four-bedroom house. One-bedroom flats are unaffordable for new graduates in every single part of inner and outer London.

Rather than move out to London’s suburbs where rents are cheaper but transport more expensive, many young people are staying closer to the centre by “hutching up” and cramming more people into shared properties to save on rent, says Richard Donnell from Hometrack.

He now analyses the London market on a “rent per bed per week” basis. “It’s like hotels, young people have been affording rents in London by basically bunking up more.”

When Kieran Aldred moved to London last September to start a graduate job at a charity, he lived in a six-person house and was still paying about 40 per cent of his gross salary on rent. “The only jobs that can make your degree pay off are in London . . . but private renting is sapping all our money,” the 23-year-old said.

While rent inflation has been particularly severe in London since the recession, private sector renting is the least affordable housing type across the whole of the country, according to the government’s English Housing Survey. The number of households renting privately in England has doubled to almost 4m since 2003 as social housing and home-ownership have become harder to access.

The Citizens Advice Bureau has seen a 68 per cent surge since 2007 in the number of people asking for help with problems in the private rental sector, according to data it has given to the FT. There has been an even steeper 76 per cent increase among 17-24 year olds.

An increasing number of families and older people have also been pushed into the private rental sector.

“When you think the typical tenancy is six to 12 months, trying to put your kids through school with that kind of insecurity is just abysmal,” said Tony Lloyd, head of policy at Shelter, the housing charity. “It’s just not fit for families.”

How heat in the property market cultivates relationships

An illustration of a separated couple in a house
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When Tom Johnson moved into a one-bedroom flat in London with his girlfriend, he admits it was partly because he wanted to escape the housing situation he was in. He had been sharing a house with strangers, in a box room that barely fitted a bed and a wardrobe.

“Living in London forces you sometimes to have uncomfortable living arrangements with people you don’t know that you want to get out of,” the 25-year-old says.

But for that, he and his girlfriend “would have left it a lot later” to move in together – or perhaps not done so at all.

They broke up about nine months into their cohabitation. In a city where few young people can afford to live alone, his story is an example of the strange things the rental market can do to people’s relationships.

“It kind of speeds up relationships because you’re always thinking: what’s my living situation going to be, how can I get some security, shall I move in with this person or that person?” Mr Johnson says.

On the other side of the coin, some people stay in relationships longer than they otherwise would have done, because they cannot afford a one-bedroom place of their own and cannot face going back into a flat-share.

Other couples actively choose to share with other people in order to save more money, though that can have problems of its own. “The whole balance and dynamic of couples in flat-shares changes the make-up of the place,” says Matt Hutchinson, director of the flat-sharing website SpareRoom.co.uk.

“There’s always two people who will side together in disagreements, or they may sit and watch telly and take over the living room. A lot of people don’t want to live with couples for that reason.”

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