‘Second Liverpool’ found hiding in the spare room

Where-is-Liverpool

We desperately need another Liverpool.

There’s nothing wrong with the one we’ve got, we just need another. Right now. We also need another every year for the next 25 years. That’s a lot of Liverpools.

But let’s start with why we need one.

There’s a housing crisis. It’s a fact. We need to build 250,000 houses every year, enough for 460,000 people. That’s basically the population of…you guessed it… Liverpool.

We don’t build anywhere near that and we’re not about to. Last time we did was 1979-80.

Even if we could build a new Liverpool every year, where would we put it? Wouldn’t it just be easier if we had a spare Liverpool lying around?

As it happens, we do.

England’s homeowners have 19 million empty rooms between them. If we can persuade just 2.5% to rent them out they’d house 475,000 people. That’s basically the population of…you guessed it… Liverpool.

We could do that right now, with a decent incentive.

And we’ve finally got one.

As of April 6th people can earn £7,500 a year tax-free by renting out a room. It doesn’t just apply to homeowners – tenants can do it too with their landlord’s permission. It took us six and a half years to convince Government but they finally did it. Sounds like a decent incentive doesn’t it?

It’s a proper win-win. Tenants benefit from increased supply of affordable rooms and homeowners get a tax break to encourage them to open their doors.

Now, has anyone got a spare Manchester knocking about?

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You can find out more about the Rent a Room Scheme and how it works here.

A Victory in the 2015 Budget

Raise the Roof logo

As most of you who’ve used SpareRoom in the past six years will know, we’ve been campaigning hard to get the chancellor to increase the Rent a Room Scheme tax threshold. We just found out he did just that in the budget, raising it from £4,250 a year to the £7,500 we asked for.

This is great news for renters – especially flatsharers. With around 19 million empty bedrooms in owner-occupied properties in England alone, we’re just not using our housing effectively. As we’re not building in anywhere near the numbers we need to, unlocking some of those rooms will make a big difference.

Here’s how:

  • Encouraging people to rent out their rooms means more supply – that helps keep rents down
  • There’s a huge demand for affordable rentals right now, especially rooms. This addresses that need head on
  • Average rents for people living with the owner are lower than traditional rents – good news for renters on a budget
  • Unlocking just 5% of those empty rooms would house almost a million people, that’s the equivalent of a city the size of Birmingham!

It’s great to see the government addressing the housing crisis with simple, effective measure that will make a difference to hundreds of thousands of people quickly, while they work out the longer term policy changes we need to fix the housing crisis for good.

Thanks to all of you who signed the petition or helped spread the word. We’d also like to thank the people and organisations who’ve supported Raise the Roof publicly over the past six years, including Shelter, Sarah Beeny and Generation Rent.
Great news all round.

Matt

Tenants Struggle As Rents Rise Faster Than Incomes, Squeezing Accomodation Budgets

 

Since 2009, UK rents have risen by 10% while tenants’ accommodation budgets have fallen by 0.5%

London room rents have soared by more than a quarter (26%) in the past five years – more than twice as fast as budgets, which have increased by just 10%

In Scotland, flatsharers’ budgets have plummeted by more than a fifth (22%) since 2009, while rents have increased by almost a quarter (24%)

Average earnings are only rising by 1.7% per year1 yet average rents are rising by 5% annually

 

Thursday 21 August 2014 – Affordable accommodation in the private rental sector is becoming ever more scarce, according to new data from flat and house share website SpareRoom.co.uk, which compares the maximum tenants can afford to spend on accommodation to average room rents.

SpareRoom’s data reveals that averageUK rents have risen by 10% since 2009 but – in the same five-year period – tenants’ budgets haven’t risen at all. In fact, they’ve fallen by 0.5%, as renters struggle with historically low wage growth and the often high cost of living.

In London, where room rents have soared by more than a quarter (26%) in the past five years, budgets have increased by a mere 10%. And in Scotland, where rents have increased by 24%, budgets have plummeted a staggering 22%.

Northern Ireland has seen the slowest rental increases over the past five years (10%), yet tenants’ budgets for accommodation have dropped 5%.

The table below shows the change in monthly rents between 2009 and 2014:

  Ave Rent 2009 (£) Ave Rent 2014 (£) Rental Increase %
London & suburbs £549 £691 25.8%
East Anglia £345 £398 15.4%
East Midlands £314 £353 12.6%
North England £304 £334 9.8%
North West England £316 £359 13.8%
South East England £390 £449 15.2%
South West England £347 £394 13.7%
West Midlands £334 £366 9.7%
Yorkshire & Humberside £312 £347 11.3%
Northern Ireland £238 £260 9.5%
Scotland £325 £403 24.2%
Wales £302 £332 9.9%
UK £500 £550 10%

 

The table below shows the change in tenants’ monthly budgets between 2009 and 2014:

  Ave Budget 2009 (£) Ave Budget 2014 (£) % Change In Budget
London & suburbs £574 £633 10.4
East Anglia £410 £433 5.7
East Midlands £363 £369 1.5
North England £361 £379 4.9
North West England £385 £402 4.5
South East England £445 £463 4
South West England £414 £421 1.8
West Midlands £392 £392 0.2
Yorkshire & Humberside £457 £381 -16.5
Northern Ireland £306 £290 -5.2
Scotland £536 £420 -21.8
Wales £340 £372 9.2
UK £415 £413 -0.5

 

Over the past year, Scotland and London have become the least affordable. Rents in Scotland have risen by 9.9% in the past 12 months, twice as fast as budgets (5.1%). In London, rents have increased by 5.1% while budgets have only increased by 3%. Based on the last 12 months, Wales is the most affordable – as budget increases, at 4%, are more than twice rent rises (1.7%).

According to the ONS, average weekly earning are rising by a meagre 1.7% per year, yet average rents rose by 5% between 2013 and 2014.

The average monthly UK room rent is currently £550 – almost a third (31%) of the average take home pay of a full-time employee2.

Matt Hutchinson, director of SpareRoom.co.uk, comments: “What’s clear is that affordable rents are becoming ever more scarce. Many people are still struggling with the cost of living and this isn’t being helped by the fact that wage growth is the lowest since records began.

“The problem is we have a chronic shortage of housing in the areas where jobs are being created, so rents continue to rise as supply fails to meet demand. In some areas of the capital we’re seeing up to 13 people compete for every room advertised.

“The only obvious short-term solution is to encourage more homeowners to let their spare bedrooms and create supply. To do that, the Rent A Room Scheme tax-free threshold needs to be raised to act as a proper incentive. It hasn’t been increased since 1997 and rents have risen by 103% in that time. Not only will this benefit renters, it could stop thousands of homeowners slipping into arrears when interest rates finally rise.”

SpareRoom is currently campaigning for the Rent A Room Scheme threshold, which hasn’t been changed since 1997, to be raised to £7,500 per annum. To find out more, please visit: www.spareroom.co.uk/raisetheroof/about

SpareRoom’s new partnership with Shelter

Homes for Good

Today sees the launch of a new partnership between SpareRoom and Raise the Roof’s main supporter Shelter. We’ve pledged to raise £75,000 a year to help fund Shelter’s free advice line, through a combination of SpareRoom donations, staff fundraising and contributions from our 3.8 million users.

Find out more about Homes for Good and why we’re keen to support Shelter in their work.

How to solve the Housing Crisis in London

SpareRoom attended the Future of London Housing debate hosted by the Evening Standard on Wednesday 20th March, in a packed room of over 1000 attendees. Housing is clearly a subject that is close to the hearts of many Londoners and the debate and following Q&A session became quite heated – showing the passion and emotion involved.

All of the panellists, including thinkers and politicians from all sides of the political spectrum, agreed that more housing supply was needed to relieve the housing crisis enveloping London. Deputy Mayor for Housing, Richard Blakeway called for London’s share of stamp duty to be ploughed back into a massive house-building programme. Whilst the MD of Berkeley Housing proposed a simplified planning process, the former London Mayor, Ken Livingstone’s call was to provide council housing for mixed communities, so there is less segregation between rich and poor in London. Alain de Botton, philosopher and writer, suggested a blueprint for attractive, affordable design that could be repeated easily and efficiently across London, removing some of the hurdles in the planning process, whilst the broadcaster and architectural graduate Janet Street Porter called for high density building, across railway lines and over car parks, like in New York. Possibly the biggest applause of the evening went to Evening Standard columnist Rosamund Urwin’s suggestions of disbanding Foxtons, banning Kirsty Alsopp and deporting the Candy Brothers. Standing up for ‘renty-somethings’ she focused on her own case of being shut out of home ownership, and renting with family members.

Whilst many of their suggestions were valid and probably will help to resolve the housing crisis in a few years to come, if more intensive building programmes do get underway (we’ve only built half the number of homes we need for the last 20 years and have a lot of catching up to do), there was a distinct lack of focus on the here and now. With so many thousands of people on housing lists in London, and the capital attracting workers and students like never before, there is an imperative need to offer practical solutions to today’s housing crisis, before London becomes a place that no real people can afford to live and work in.

Sharing existing resources seems to be the elephant in the room that nobody would mention. Amongst the talk of pressing empty properties and even offices into homes for the needy, there is no mention of the thousands of under-occupied properties that can help to ease the crisis. This is already happening – as teenage children grow up and move away, ’empty nesters’ are starting to rent out their spare rooms in their thousands – but we need to see more of this, to make an impact. What could the policy makers do to help encourage this trend?

We would suggest a raise in the tax free limit homeowners can earn through the Rent a Room scheme for starters – it’s been at the same rate since its introduction in 1997, whilst rents have been rising dramatically. Why not make it more attractive for people with spare rooms to take in a lodger, and help to remove the pressure on the limited supply in the private rented sector, and the social rented sector too? We’ve been pushing for this with our Raise the Roof campaign for some time, and hope that the Chancellor may see fit to increase the tax benefit in his next budget, even if it wasn’t included in last week’s.

Other ways to increase supply include removing some of the hurdles involved in turning a property into an HMO. This will promote more efficient use of existing property, and help young people to find somewhere affordable to live in the here and now, rather than being told to wait for houses yet to be built.

Do you agree? What do you think could be done to help solve the housing crisis sooner, rather than later?

Raise the Roof campaign update

After more than a year of campaigning for an increase to the Rent a Room Scheme tax threshold it looks like this won’t be happening any time soon. We always knew it would be tricky to convince the government to tackle this issue head on but, despite a negative outcome, there has been much to be proud of.

Not only did we manage to bring the issue to the attention of the housing minister (both the current minister and his predecessor) we also had the opportunity to meet with Treasury officials and make them aware of the need for change, even if that change doesn’t happen now. In a time of severe cuts across the board it was always going to be tricky to get this through.

We’d like to take this opportunity to thank every single one of you who signed our petition, urged your MP to sign the EDM and helped us with anecdotal evidence. We’d also like to thank Shelter, Sarah Beeny, The National Landlords Association, Landlordzone and Zoopla for their support for the campaign.

Having made inroads and helped raise awareness this is an issue we will be returning to – after all, the out of date tax allowance will only become further undervalued as time progresses.

In the meantime thanks to all of you, we really do appreciate your help.

Cheers

Matt

Budget is a chance for govenment to make a real difference to rental market

With reports already circulating of plans to increase the stamp duty threshold to £250,000 it will be interesting to see what else the government has up its sleeve in the 2010 Budget when it comes to property.

The main change we’d like to see is an increase in the tax threshold of the Rent a Room Scheme from £4,250 to £9,000. Despite 60 MPs (including 30 Labour members) in agreement we won’t be holding our breath as the limit hasn’t been raised in almost 13 years (i.e. not at all under the current government).

The National Landlords’ Association have again voiced their support for the Raise the Roof campaign, which hopes to make it easier for people renting out rooms in their own homes (whether rented or owned). There’s a desperate shortage of rental accommodation in the UK and there’s a source waiting to be tapped into.

We’ll find out what the budget holds in due course – our guess is that there won’t be too any giveaways along the lines of an increase in the stamp duty threshold.

40 MPs back Raise the Roof – so far…

Support for EDM 860, which backs the Raise the Roof Campaign, is growing. So far 40 MPs have added their signatures to the list with Labour topping the party list at this point.

Totals for the main parties are:

  • Labour 19
  • Lib Dem 8
  • Conservative 5
  • others 8

See whether your MP has signed the EDM – mine has, and I got a reply to my letter telling me he was going to!

MP for North Devon, Nick Harvey, has gone a step further and issued a press release stating his support for the campaign.

Cheers

Matt

Raise the Roof needs your MP’s support

Firstly, can I just take a moment to say a massive thank you to everyone who has signed the Raise the Roof petition, written to their MP or just been in touch to give us their support and let us know they’re backing the campaign. All of it is very much appreciated by everyone at SpareRoom and (I’m sure) all those in the UK who take in lodgers.

We now need your help once again! Paul Keetch (Liberal Democrat MP for Hereford) has tabled an Early Day Motion (or EDM) declaring support for the campaign and asking MPs to add their support by signing the motion. EDMs are a great way of seeing how much support exists within parliament for a given cause. Paul’s EDM (EDM 860) reads as follows:

RAISE THE ROOF CAMPAIGN
10.02.2010
Keetch, Paul
That this House congratulates the Raise the Roof campaign; believes it is important to ensure that there is sufficient reward for homeowners to rent out their spare room in these difficult economic times; calls on the Government to increase the tax threshold on renting out spare rooms from £4,250 to £9,000; believes that the change in the tax threshold would help more homeowners to avoid arrears and repossession through the extra income obtained; points out that almost 60 per cent. of the income from all spare room rentals in the United Kingdom is above the current tax threshold; and calls on the Government to implement this scheme forthwith.

Obviously the more signatures the EDM gets the better so please, please (I’ll say it once more), please do take a minute to write to your MP and ask them to sign, even if you’ve already written to them about this. You can write to your MP online (even if you don’t know who they are).

All we ask is that you mention 2 things in your email or letter:

  1. The EDM’s number which is 860 – this makes it easier for your MP to find it without trawling through lists
  2. That Raise the Roof is supported by Shelter and the National Landlords’ Association – this shows that there is support from recognised and respected authorities

Thank you all once again, we’re starting to get ourselves heard and your help makes this possible. Finally if you haven’t signed the petition….

OK, I’ll leave you alone now.

Cheers

Matt

Raise the Roof is raised in the house

Two bits of good news on the Raise the Roof campaign today.

Firstly, we’re pleased to be able to announce that an EDM (Early Day Motion) in support of the campaign has been tabled by Paul Keetch. For those who don’t know what an EDM is (I didn’t until recently) it’s a means by which MPs can voice their support for an issue as a means of gauging how much interest there is in the house. Read more about EDMs.

Secondly, housing minister John Healy took part in a live webchat on the No.10 website today so we took the opportunity to raise the campaign with him and bring it to his attention once more.

You can help raise awareness further by writing to your MP to ask them to sign the EDM.

More news will follow.

Cheers

Matt