The proportion of first-time renters has gone down over the last eight years
The number of first-time renters continues to fall as rising rents have discouraged many young adults from leaving the family home, according to residential estate agent Hamptons.
During the first five months of 2023, Hamptons reported that the proportion of first-time renters was down to 4.6% of all tenants, which equates to around 43,280 new rented households in England this year. Eight years ago, first-time renters made up 6.1% of all tenants who moved into a new home, or a total of 71,860 new rented households in England.
Hamptons noted that had young adults continued to move from the family home into rental accommodation at the same pace as they did in 2015, it would mean there would be an extra 104,550 households looking to rent in England between 2016 and 2023.
“Around 105,000 missing renters are relying on the hotel of Mum and Dad,” Aneisha Beveridge (pictured), head of research at Hamptons, said. “The number of first-time renters has been steadily falling since 2015, pushed down by the spiralling cost-of-living and record-breaking rental growth which has stretched affordability to the edge of its limits.
“The key issue is that over half of that rental growth has occurred within the last four years. And this has come at a time when household incomes are under pressure from other rising costs. That said, many landlords are also facing similar pressures, and this is one of the key factors underpinning rental growth this year.”
The latest Hamptons Monthly Lettings Index found that the average would-be tenant in Great Britain is set to save £12,290 by continuing to live rent-free with parents this year, as the average rent paid by someone leaving the parental home passes £1,000 per month for the first time. In total, this will save would-be first-time renters in England a total of £1.3 billion in rent in 2023.
Those who left home paid an average of £1,024 per month on their new place so far this year, up from £925 in 2022, which will cost them an additional £1,190 each year. Ten years ago, they spent an average of £642 per month when leaving home, which equates to 37% less than today.
However, Hamptons said that despite rising rents, affordability has improved for young renters as the average pre-tax income of an 18- to 24-year-old in the UK has risen by 42% since 2015 to average £18,900.
Meanwhile, the pace of rental growth cooled in May, with the average rent on a newly let home in Great Britain rising 9.1% year-on-year, down from 11.1% in April. Every region, except for the South West, saw rental growth slow.
London, where rents have been rising fastest, posted the biggest slowdown. The average cost of a newly let property in the capital rose 13.3% year-on-year in May, down from a record 17.2% in April. Scotland was the only other region to record double-digit rental growth last month.
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