New research from Nationwide Building Society reveals the exponential rise in rents equates to an increase of 119,300 per cent1 in London since the days of Charles Dickens.
Characters such as the cold-hearted miser, Ebenezer Scrooge, would have turned his nose up at such high prices today, while his poorly paid clerk, Bob Cratchit, would certainly have struggled to stump up rent in the capital, due to costs rising 10 times higher than inflation2.
London in the 1840s was going through enormous change. From Britain’s population boom and large numbers of people flocking to the newly industrialised centres, large cities were under massive pressure to house the exploding population. A Christmas Carol, the classic Dickens’ novel published 175 years ago in 1843, gave a snapshot into an era when living conditions were brutal for most Londoners and housing conditions were poor, as many struggled to afford even the smallest rooms. While conditions have undoubtedly improved today, the costs of housing have continued to rise at an unprecedented rate.
Data shows that for Ebenezer Scrooge to rent his three-bedroom house in Lime Street in the City of London, the cost would have been around 7 shillings, 8 pence a week in the 1840s3. In today’s money this equates to around £46 per week (2017 comparison)4. But had Scrooge rented today, he would have grimaced at the cost of £459 per week5 for a three-bedroom house in London – an increase of 119,300%.
If the pace of rent growth continues at the same rate for a further 175 years, a three-bed home in London would cost on average around £548,076 per week to rent in the year 21936.
But while Scrooge may have had the means to rent, Bob Cratchit and family - including Tiny Tim - could not have afforded such a high rent on 15 shillings per week7, so he probably would have only been able to rent a single room for his entire family, costing around six shillings a week8 in what would have been a Victorian slum in Camden. In today’s money, this would have been the equivalent of £18.139 a week. In comparison, a room in Camden in today’s market would be on average around £247 per week10.
1840s housing could not keep up with the population boom
By the 1840s inner London was bursting at the seams. Housebuilding did not and could not keep up with this spike in demand as the boom in railway construction meant that materials and labour were diverted11. Only one in ten owned their own home in the 1840s, leaving most households in the hands of their landlords12. By comparison, today 63 per cent13 of Brits own their own home, although with the rise in house prices homeownership remains a challenge for many.
Nationwide builds on the roots of building societies founded in the 1840s to help people like Bob Cratchit get on the property ladder. Had Bob joined one of the new building societies, it is likely his mortgage payments would have been the same as his rent, plus he would have ended up with a home of his own at the end of his mortgage term.
Dickens’ weekly magazine ‘Household Words’ published an article in the early 1850s describing the appalling living conditions in parts of Camden Town and putting the rents there at six shillings a week. Which is exactly, give or take a sixpence, the weekly mortgage repayments of Mr Alfred Idle, Nationwide’s first mortgage holder in the 1880s.
Sara Kinsey, Nationwide’s Head Archivist, said: “Dickens’ classic novel paints such a terrible picture of the housing available in London in the 1840s, especially to those at the lower end of society. Added to that, supply and house building couldn’t keep up with demand. This situation has been similarly replicated, to a lesser extent, in more recent times. Nowadays, availability of properties on the market is more of a trickle than a torrent and, although it has picked up slightly, the uncertain outlook and squeeze on household incomes is helping to dampen buyer demand.”
Notes to Editors
1 Based on the increase from average rent of £20 per annum in 1843 to £23,880 per annum in 2018
2 11,980% rate of inflation compared to 119,300% rate of rent increase
3 Nationwide Building Society research based on historical newspaper adverts from the 1840s
4 https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator (This link will open in a new window)
5 Mean average annual rent for a three-bed home in London – Valuation Office Agency (This link will open in a new window)
6 A 119,300% increase on the average rent of £23,880
7 A Christmas Carol, 1843
8 W Thomas, Agar Town in Household Words, 3 March 1851
9 http://www.nationalarchives.gov.uk/currency-converter/#currency-result
10 https://www.gov.uk/government/statistics/private-rental-market-summary-statistics-april-2017-to-march-2018 (This link will open in a new window)
11 Geoffrey Best, Mid Victorian Britain and Herbert Robinson, The Economics of Building
12 Stefan Muthesius, The English Terraced House
13 MHCLG English Housing Survey
About Nationwide
Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.
Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.
