Why the rental market is (currently) screwed
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 the market.
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 around 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?
The government needs to decide what it wants to do about the housing crisis. But they’re not acting fast and, even if they do, any changes will take time to make a difference. However, there are actually around 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. Renting out a room isn't for everyone, but we don’t need everyone to do it to make a difference.
The good news is that we seem to be turning a corner. Looking at the numbers right now, it looks like demand could be peaking and about to calm. This is a unique situation, caused by a unique couple of years we’ve all lived through. That doesn’t make it any easier if you need to find a room to rent right now, but we’re working hard to do what we can to make a difference.
Image credit - Jon Tyson