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11:05 AM, 18th January 2023, About A year ago 6
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As tenant demand continues to outstrip supply, room rents have hit a record high, a survey reveals.
According to SpareRoom, rents reached a record at the end of last year as landlords continue to lose confidence in the rental market.
The flatshare site says that average room rent grew by 13% year-on-year in December.
The average price for renting a room in Greater London was more than £900 per month for the first time ever last September – and has continued growing to reach £949 in December.
Matt Hutchinson, a director at SpareRoom, said: “Although demand has eased since the record peaks we saw in August and September, the combined effect of low supply and the cost-of-living crisis means rents have continued to rise.
“The last 12 months has seen rents across the UK hit record highs and, unless new supply comes into the market over the coming months, it’s hard to see those rents come down meaningfully in 2023.”
He added: “High rents not only make it difficult for tenants who need to move now, it also means that many stay put to avoid paying more rent.
“Unless people are able to move freely, the impact on the economy could be significant.
“Work is the key reason people move, but if a potential pay rise is wiped out by having to pay more rent, lots of people will simply stay where they are.”
The data reveals that tenant demand reached a nine-year high in August, but things have since calmed down since, though tenant demand continues to far outweigh supply as the number of rooms available decreased last year.
The firm points to its recent poll that suggests there will be a further fall in the supply of rooms to rent this year – with 41% of landlords either looking to reduce their portfolio in 2023 or exit the rental market altogether.
SpareRoom says the UK’s rental market is in ‘chaos’ and shows no sign of resolving itself anytime soon and the average UK room rent was £731.
London saw the biggest increase in room rents across all UK regions in the year to December, while Scotland was the only region to experience a decrease (-6%) in average rents.
The platform says that demand for rooms was at an all-time high in late summer/early autumn, while supply was at a nine-year low with 245,351 renters searching and only 34,085 rooms available.
Although demand dropped in the lead up to Christmas, the number of rooms also fell over the year and when combined with cost-of-living increases, means the situation is tough for renters.
A recent SpareRoom poll suggests that the next 12 months will see a further decline in supply, with 41% of landlords/agents either looking to reduce their portfolio in 2023 or exit the rental market altogether.
More than half (57%) of those surveyed admitted to not having confidence in the rental market right now and landlord confidence has decreased over the last 18 months.
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Robin Pearce
11:33 AM, 18th January 2023, About A year ago
Net migration at 500k/year is boosting demand
= A city the size of Bristol each year !
When people first arrive in UK their first port of call is somewhere to rent. Quite a few of my tenants are legal migrants. Ive noticed as net migration has increased so has the proportion of migrants applying to rent my flats.
Nothing against migration or legal migrants. Just saying it how it is. Invariably I find they are generally very nice people.
Though I do think the net migration figure needs reducing purely due to the extra burden being placed on housing & infrastructure etc
Which for some reason people rarely mention.
Its a touchy subject I guess, but by far the main reason for the so called housing crisis.
Only need more houses when you have more people !
Crouchender
13:14 PM, 18th January 2023, About A year ago
Reply to the comment left by Robin Pearce at 18/01/2023 - 11:33
Landlords have been selling their 3/4 bed properties due to 'Additional HMO' regulations being enforced by councils borough-wide especially in London. Has meant tenants struggle to find a room as these Landlords have dropped out the market like me. Who wants to put up with extra regulation and agro from council clipboard numpties and OTT HMO fees. This will get worse as overzealous councils are dishing out fines left right and center for even minor issues in HMO regulations for the 3/4 bed properties.
Well done to the regulatory police (council) for being the 'root cause' to these problems in London and doing a rubbish job at dealing with 'below the radar Landlords' i.e. Bad LLs never apply for licences anyway.
Robin Pearce
13:22 PM, 18th January 2023, About A year ago
Reply to the comment left by Crouchender at 18/01/2023 - 13:14To add to Landlord woes.
The New EPC regs will be absurd. Because EPC software takes no account of all electric flats being lower carbon footprint because half of our electricity is now generated from renewables.
Most gas heated flats have a better EPC rating yet higher CO2 output🤔
EPC software was designed purely to look at running cost & unless reprogrammed to allow for this is the wrong tool to assess carbon footprint.
I wrote to my MP about this who then wrote to Lord Callanan who didn't answer my question. He just replied with a generic letter overlooking this fundamental flaw in EPC software.
Yet it's part of the aim towards net zero.
Ground floor flats in many cases will need floors dug up & insulated underneath at vast expense to achieve band C.
So we have a rapidly rising UK population mostly due to absurdly high net migration now twice rate it was under Blair, at the same time there'll be fewer places to rent as it won't be viable to be a landlord soon so they'll sell up.
Chris Rattew
14:15 PM, 18th January 2023, About A year ago
Reply to the comment left by Robin Pearce at 18/01/2023 - 13:22
There is an issue with EPCs. There is also an issue with authorities sending generic letters instead of considering the question. At the moment, if you change from gas to electricity, they will just use more gas to generate electricity, as it is the marginal demand that is affected, so carbon emissions will decrease. However, we need to look to the future when gas is used on only a few days each year to generate electricity. Then making this change would decrease the carbon footprint The EPCs should be looking ahead ten years to an all-electric world. On environmental grounds, our current plans are to continue with gas in the short term, while investing in insulation and waiting for better heat pumps. As this thread relates to rents, changes in EPC regulations need a longer lead time and a more gradual implementation, otherwise rents will rise.
Alistair Cooper
14:19 PM, 18th January 2023, About A year ago
As the majority of room rents are fully inclusive of utility bills (which by April 23 will have risen by as much as 400% for electric and 700% for gas) rents have actually not increased at all. If we were to pass on the full impact of utility cost rises we would need to charge over £1000/pcm per room (as opposed to £650n almost a 50% rise totally unaffordable by most tenants just to stand still with the ‘rent element’
Interest costs and regulation nonsense on top !
Contendedted
15:45 PM, 18th January 2023, About A year ago
Reply to the comment left by Robin Pearce at 18/01/2023 - 13:22
That could mean years of floors being dug up by different landlords at different times. Did anyone think this through?