Why the rental market is screwed
October 2022- We’ve been running flatshare sites since 1999 and we’ve NEVER seen the rental market like it is today. There are more people looking for rooms than ever before, fewer rooms available than at any time since 2012 and record high rents as a result.
Here’s what that looks like:
Shocking isn’t it? But how did we end up here and, more importantly, how can it be fixed quickly?
The demand bit is pretty simple. Covid created a huge backlog, where people couldn’t move (or didn’t want to). So everyone’s in the market at the same time. But why are there no rooms? The main reason is that landlords are quitting.
Around five years ago, the government brought in new legislation, which increased landlords’ costs and drove rents up as a result. You can see a decline (in the graph above) in the number of rooms available from the time the changes came into force around five years ago. When we recently polled landlords, a third told us they were reducing the number of properties they have this year and 16% said they were quitting altogether. Love them or hate them, we need landlords. Good landlords, that is.
But what can we do to fix the situation right now?
According to the English Housing Survey, there are something like 21 million empty spare rooms in homes in England alone. If just 2% of those homeowners rented out their spare rooms, we’d create a virtual city the size of Manchester (without laying a single brick or changing a single law). That could happen pretty quickly.
That would more than cover the shortage and it would also force rents down. And the extra money could help thousands of people struggling with the cost of living crisis at the same time. It helps people on both sides.
We know lots of you are renting your rooms out already and, if you are, thank you! If you’re not, now could be the ideal time to look into it. With demand so high, you’ll have plenty of potential lodgers to choose from, and the extra money might just help you navigate the rising cost of living.
We know it’s not as simple as just doing it, of course. So we’ve put together a step by step guide to taking in a lodger, along with advice from people who’ve done it before on how to deal with things like choosing the right lodger for you and what to ask them in advance!
Image credit - Benjamin Elliott