Utilising existing stock to return rents to 2017 levels

New data from SpareRoom has revealed that as well as simply building more homes, better utilisation of existing stock could rebalance the market and in theory, bring rents back down.

Related topics:  Finance,  Property,  rent
Property | Reporter
24th November 2023
To Let 733
"The common belief is that we simply need to build more houses. That’s true, but there’s also far more we could be doing to use our existing housing stock better"
- Matt Hutchinson - SpareRoom

In 2017 there were an average of 2.4 renters actively in the market per room advertised. However, in the six years since then, that’s more than doubled to 5.36 renters per room, with demand increasing by 53%, while supply has fallen by 31%. As a result, the average UK room rent has shot up by 22%.

Yet the latest census data revealed that England and Wales have 26 million empty bedrooms in owner-occupied properties alone. That’s made up of 8.9 million homes with at least two spare bedrooms and a further 8.3 million with one bedroom unoccupied.

If just 1.74% of those rooms were rented out, the ratio of renters to rooms would return to 2017 levels.

In theory, this change could bring average UK room rents back to levels seen in 2017 (£635) when the ratio of renters to rooms available stood at 2.40. Comparatively, current average room rents between January and October 2023 reached a staggering £774 in the UK, with the ratio of renters to rooms available increasing to 5.36.

SpareRoom data indicates that between January and October 2017, there were 1,288,051 active renters with 536,629 available ads on the flatsharing website. In contrast, within the same timeframe in 2023, there were 1,971,167 active renters and only 367,622 available ads on SpareRoom, affirming the ongoing supply and demand crisis in the rental sector.

Matt Hutchinson, SpareRoom director comments: “The common belief is that we simply need to build more houses. That’s true, but there’s also far more we could be doing to use our existing housing stock better. Persuading a tiny fraction of those with spare rooms to rent them out could effectively rebalance the market. That might not completely reverse the massive rent increases we’ve seen in the last couple of years, but it would potentially make a huge difference.

"And it’s not a case of having to force people into doing it. Thousands of homeowners across the UK already take in a lodger, helping them cope with the high cost of living and the sharp rise in mortgage rates since last year’s mini-budget. It’s a win-win, at a time when politicians seem out of ideas when it comes to bringing rents down in a meaningful way."

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