Why is rent so expensive?

This story suggesting that private rent is unaffordable struck a chord. I am in the course of selling the two bedroom flat in central London where I have been for the last 10+ years in order to move somewhere more suitable to my current situation (wife and two young kids now). Moving into medium-term rented accommodation was an option that I have been considering in order to ease the chain on a new purchase. But it turns out that a reasonable family house with a sensible commute into London appears to be over £2,000 a month in rent. I can’t afford that and I am a 10 year PQE City lawyer in one of the country’s leading law firms! Now that doesn’t make me anywhere near as well off as some people might imagine (hint: I’m certainly not troubling the top rate tax bracket yet), but if someone in my position can’t afford it, how the hell anyone on the supposedly average salary of about £26k/year is supposed to afford it is beyond me.

I have three options:

1. Buy somewhere via a 25 year mortgage and the capital that I have built up as a result of owning the flat for the last 10 years. The fact that this would cost me less than half what a similar property would cost in rent demonstrates how utterly shafted Generation Y have been by the property market over the last decade.

2. Move my family of four into a two bedroom maisonette.

3. Move somewhere that will require 3-4 hours a day of travel to get to work and back.

Has this country gone utterly mad?

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