Record demand for rooms puts pressure on flatshare market

Tenant demand hits record highs as supply drops and flatsharers compete for rooms.

Findings from SpareRoom reveal that demand for rooms has reached record levels, with the Merseyside town of Bootle recording the highest demand.

The flatshare website is urging the government to raise the Rent a Room Scheme threshold, arguing that encouraging more homeowners to take in lodgers could help ease pressure on the private rented sector.

High tenant demand

According to the data, in Bootle, where average room rents are below £500 a month, more than 12 people are competing for every room available.

Meanwhile, Richmond, where the average room costs more than £1,000 a month, is also among the locations experiencing the highest demand.

A common thread among the locations with the highest demand is that none are major cities. Instead, they are within easy commuting distance of major employment centres, allowing flatsharers to access job opportunities in nearby cities while living outside them.

In West Bromwich, for example, just nine minutes by train from Birmingham, there are eight renters competing for every available room. In Hamilton, less than half an hour from Glasgow, demand stands at 8.1 enquiries per room.

Renters being priced out of shared living in major cities

SpareRoom director Matt Hutchinson is calling on the government to increase the Rent a Room Scheme tax-free threshold.

He said: “The prolonged high cost-of-living has split the flatshare market.

“You’ve got hard-up renters being priced out of shared living in major cities; you’ve got affluent young professionals who don’t see renting solo as a sensible stepping stone to buying so they’re sharing for longer to save faster; and you’ve got those flatsharing in their 40s, 50s and beyond who may prefer a suburban lifestyle.

“In suburbia there are typically more under-occupied homes that offer an underused but critical supply source for the rental market. Encourage more homeowners to rent out rooms to lodgers, and take advantage of tax relief on their earnings, and we could ease demand in the tightest spots while curbing rent rises all round.

“The new Chancellor is missing a trick if he doesn’t raise the Rent a Room Scheme threshold to reflect rents today in his upcoming Budget. It hasn’t changed in 10 years.”

Under the Rent a Room Scheme, homeowners and landlords can currently earn up to £7,500 a year tax-free from letting out furnished accommodation in their main home.