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SpareRoom data indicates rental market crisis
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New data from flat share site SpareRoom shows that demand for rental rooms is at an all-time high and supply has hit a nine-year low. Rent prices have also gone up 32% in the same period with no sign they’re slowing down.
In their recent poll, 94% of landlords said they had no confidence in the current government’s approach to housing. The reasons why included:
- Changes to government policy/taxes – 81%
- Future changes to legislation/taxes – 75%
- Rising energy costs – 58%
- Rising interest rates – 46%
36% of landlords polled revealed they plan to reduce their portfolio this year and a further 16% plan to leave the rental market entirely by the end of 2022. SpareRoom says this is all contributing to rising rents, with the average UK room rent now at an all-time high.
The results also reveal each of the UK’s 50 largest towns and cities saw rent increases, with Edinburgh seeing the biggest jump (+31%). Sunderland (+22%) and Glasgow (+21%) also saw high rent increases from Q3 2021 to Q3 2022.
A recent SpareRoom poll also revealed two out of five (40%) renters have had to pay over the advertised price for their current room, rising to nearly half (47%) for London renters. The main reason given was that the landlord put the rent up (60%), followed by over a third (37%) saying they ended up in a bidding war. In order to secure their rental, nearly half (47%) of renters surveyed said they had to decide on the room at the viewing, 20% had to pay several months’ rent up front, and 12% paid a deposit before viewing the property.
Matt Hutchinson, SpareRoom director, comments: “We’ve been running flatshare sites for over 20 years and we’ve never seen the market like this. The spike in demand will ease over time, but the real worry is the continued drop in supply. Landlords are leaving the market in alarming numbers and renters are facing an incredibly tough time. The government has decided growth and jobs are their focus. But jobs are no use if people can’t move to take them.
“One silver lining is that homeowners are starting to look at renting out their spare rooms to make a little extra cash and help with the cost-of-living crisis. That could provide much needed supply far quicker than anything government can do and will bring rents down, whilst helping struggling homeowners too.”
