New research from Hamptons has unveiled a concerning trend in Great Britain, with rising rents leading to a decline in the share of tenants leaving their family homes since 2015.
In the past, first-time renters comprised 6.1% of all tenants moving into new homes, resulting in a substantial 71,860 new rented households in England. However, during the initial five months of 2023, this figure plummeted to 4.6%, translating to approximately 43,280 new rented households in the country this year.
If young adults had continued to vacate the family home at the same rate as they did in 2015, an additional 104,550 households would be seeking rental properties in England between 2016 and 2023.
Aneisha Beveridge, head of research at Hamptons, stated, “Around 105k missing renters are relying on the hotel of Mum and Dad.”
“The number of first-time renters has been steadily falling since 2015, driven by the skyrocketing cost of living and record-breaking rental growth, which has stretched affordability to its limits. Young adults are opting to stay at home for longer periods in order to save money, with some bypassing the rental market altogether and moving on to homeownership instead.”
Beveridge continued, “The positive news for tenants is that rental growth is starting to slow down, and we anticipate this trend to persist throughout the remainder of the year. Average rents across Great Britain have surged by 47% over the past decade, lagging behind the 69% growth in house prices during the same period.”
“Nevertheless, the main concern is that over half of the rental growth occurred within the last four years. This surge coincides with a time when household incomes are strained by other mounting expenses. However, it should be noted that many landlords are also facing similar pressures, which contributes significantly to rental growth this year.”
As the average rent paid by those leaving the parental home surpasses £1,000 per month for the first time, the average prospective tenant in Great Britain is projected to save £12,290 by continuing to live rent-free with their parents this year.
Young adults residing in the South of England are less likely to become new renters compared to their counterparts in the North. Thus far in 2023, those leaving their parental homes represented 5.4% of all renters in the North of England (North East, North West, and Yorkshire & The Humber), while comprising only 3.7% of renters in the South of England (London, East, South East, and South West).
In May, the average rent for newly let homes in Great Britain escalated by 9.1% year-on-year, slightly down from the 11.1% surge witnessed in April.