Hostel takeover as young are priced out by rising rents

Lisa Kelly on her hostel bunk bed. Photograph: Hackney Citizen

Cramped: Lisa Kelly on her hostel bunk bed. Photograph: Hackney Citizen

Lisa Kelly fumbles for her coat in the dark, dressing only by the soft glow of her iPhone to avoid waking her dorm mates, catching their last hour of sleep before night shift begins.

For more than a year Lisa has shared a room with up to 11 residents at a trendy Shoreditch hostel.

It’s a modest room – six sets of bunk-beds line the walls of the dorm, which features a separate shower and toilet for its occupants to share.

Downstairs there is a communal lounge and kitchen, where free breakfast is on offer every morning and an adjoining bar gives lodgers discount rates on food and drink.

At £15 per night it is not the cheapest accommodation, but for Lisa and many other 20-somethings, hostel living has become the feasible solution to remaining in Hackney, and in London.

The unlikely home of the 20-year-old Australian sits in the beating heart of the London’s leading regeneration success story, which today beckons the young and creative.

When Lisa landed in Shoreditch in late 2014, halfway through her two-year youth mobility visa, it was on the recommendation of a friend, but the upbeat vibe of the area had compelled her to stay.

“Most people around here are just young, trying to get by and have a good time,” she said. “Everyone here is in the same boat. That was the appeal.”

With a year of travel under her belt and a dwindling bank balance, Lisa said at first she had no chance of paying the hefty deposit and upfront rent required by landlords and estate agents.

When she picked up a waitressing job paying above the minimum wage, she started the search only to come up against brick wall after brick wall.

“I looked at houses in Whitechapel and Brick Lane but that was way too expensive. I looked next to Victoria Park and it was really dingy housing that smelled.

“[A room] next to Victoria Park was asking for £580, but at the time I only had £1000 coming into my bank account, so I wouldn’t have had enough to put down [a deposit],” she said.

“You’d have to spend another month not eating and not buying any necessities because you just put all the money down for a house.”

Lisa said if high rents weren’t enough of a challenge, the competition for even subpar accommodation in Hackney was fierce.

“There were so many places that you’d look at and send an enquiry,” she recalled, but “there weren’t many that I got to go and see. It’s like dating.”

Despite the setbacks, Lisa considers herself lucky.

“I know people that share beds to split the rent so they can actually afford it every month,” she said.

“It’s crazy, the lengths people go to. That’s why I just stayed in a hostel, because at least I have my own bed.”

Lisa admitted hostel life has its downsides.

“You’ve got 12 people living in one room together and you never have your own space,” she said.

“You can never find your stuff in the dark and you can’t turn the light on because there’s someone sleeping, and there’s that one person that doesn’t shower and everything smells bad.

“Then there are people having sex in the rooms.”

But she said “the good outweighs the bad”- she wouldn’t have stayed otherwise.

For around £440 a month she has a roof over her head, a bed, breakfast and the occasional free meal from a fellow hostel-mate.

“It’s really fun, it’s really social, there’s a family vibe and there’s always someone to talk to and something to laugh about.

“It’s a communal environment, everyone is taking care of one another.

“And if you sit in the kitchen long enough, someone will feed you.”

Lisa is an exception to the small number of ‘long-termers’, who can spend a handful of months saving up for a housing deposit and waiting for a suitable room or flat to become available.

Ankit Love was in the final days of his hostel stay when he spoke to the Citizen last month.

A musician, the 32-year-old battled for more than two months to save up a deposit and find a suitable room in the area.

For £600 a month he has arranged to lease a small soundproof room in the area with no windows underneath a railway arch.

While for some, spending £600 on a room with literally no view might be unthinkable, Ankit said it perfectly suited his needs.

“It’s a small room with no windows or anything, but I can make music there as a trade-off,” he said.

“It probably won’t work for most people but for me it’s good.”

Rent in inner East London has grown significantly faster compared to its inner West, North and South counterparts in the past five years, according to figures from the Valuation Office Agency.

A self contained room in the inner east of the city might have set a tenant back £150 per week in 2010, agency figures for that December show.

Last November’s figures reveal the same accommodation would have cost £223 per week – more than a £70 increase in the past five years – while other areas of inner London saw an average rise of £22 to £42.

Two bedrooms would cost inner East Londoners £112 more and three bedrooms £170 more than they would have five years ago.

Butler and Stag co-founder Neil Leahy has worked in the borough for more than a decade and has seen a shift in both demographic and price first-hand.

He said 10 to 15 years ago it was teachers and local authority workers moving in, but today it was solicitors and accountants.

“You can see it just looking at the vehicles parked outside the properties now,” he said.

“To buy [or rent] here you need to be on a substantial income.

“For the individuals that bought here 10 to 15 years ago, they’re moving out now to downsize or buy larger properties and they’ve made a substantial return on their property value.”

Mr Leahy said in the past five years rent across the borough has risen by an average of 30 per cent.

And according to the Association of Residential Letting Agents and National Association of Estate Agents, this year will see another price hike across the board, with new government legislation set to increase compliance costs for landlords – the brunt of which would be borne by the tenants.

In a recent report the associations also highlight the significance of the housing shortage in the UK.

And the competition is not only felt by prospective buyers and tenants but also the estate agencies.

“When I first started out at the borough, the particular agent I was working for, we were one of about 10 estate agents,” Mr Leahy said.

“Now there’s probably in excess of 70 estate agents.”

Today Mr Leahy said he picked up around one third of the properties compared to 15 years ago.

Much like the lettings and estate agents groups, he said the answer was in catering to the new demand.

“Until there’s an answer to the shortage of properties, prices will continue to rise,” he said.