Young people expect to be renting for longer, with their ability to save for a deposit hampered by high rents and higher deposit demands by mortgage lenders. Demand for flatshares has increased massively since 2008 due to such economic factors as well as government policy.
Lack of credit for house purchases has been the most obvious factor, along with the change in housing benefit rules. Since January 2012 this has meant that under 35s receiving an allowance will only be covered for a single room in a shared house, rather than their own one-bedroom flat. This, together with the priced out generation of prospective home-owners, puts pressure on the limited supply of shared housing.
The Joseph Rowntree Foundation report on housing, June 2012 stated:
“In 2008, one main pathway into private renting emerged. Approximately one million ‘young professional renters’ left the parental home and entered the Private Rental Sector, where they remained for some time. Most had qualifications higher than A-level standard and they shared accommodation. … The most significant change is likely to be increased competition for PRS accommodation from young people unable to access home ownership or social rented accommodation.”
Flat-sharing is seen as a flexible and affordable solution for many people. Whilst 48% of renters say they’d be happy to rent longer term, almost one in five (18%) think they’ll never be able to buy.
“More young people are sharing, and sharing for longer. On top of that we’re seeing an uplift in the number of older people sharing who simply can’t afford to rent on their own. For some this marks a return to sharing – for others it’s a rude awakening. Whatever the reason the demand for rooms has never been higher,” says Matt Hutchinson, director of SpareRoom.co.uk.
Landlords wishing to join in this growth market should research into what it takes to rent property by the room. SpareRoom.co.uk provides many useful resources for landlords, including a free Guide to Renting by the Room, from which this article is an extract.