Rising rents mean the share of young people leaving the family home and moving into rented accommodation has plunged, says Hamptons lettings agency.
Back in 2015 so-called ‘first-time renters’ made up 6.1 per cent of all tenants who moved into a new home, which equated to 71,860 new rented households in England.
However, Hamptons says that during the first five months of 2023, that figure has fallen to 4.6 per cent which equates to around 43,280 new rented households in England this year.
The agency says that had young adults continued to move from the family home into rental accommodation at the same pace as they did in 2015, it would mean there would be an extra 104,550 households looking to rent in England between 2016 and 2023.
The reason for the tumbling numbers is likely to be easy to spot – money.
As the average rent paid by someone leaving the parental home passes £1,000 pcm for the first time, the average would-be tenant in Britain is set to save £12,290 by continuing to live rent-free with parents this year. In total, this will save would-be first-time renters in England a total of £1.3 billion in rent in 2023.
Those who left home paid an average of £1,024 pcm on their new place so far in 2023 says Hamptons up from £925 pcm in 2022.
Young adults living at home in the South of England are less likely to become new renters than those in the North.
So far this year, those leaving the parental home made up 5.4 per cent of all renters in the North of England – that is, North East, North West and Yorkshire & The Humber – compared to 3.7 per cent of those renting in the South of England (London, East, South East & South West).
While the share of tenants leaving the family home has risen in the North over the last year, tougher affordability has kept a cap on the number of would-be tenants doing the same in the South.
But Hamptons says that despite rising rents, affordability has actually improved for young renters.
It says that according to government figures, the average pre-tax income of an 18 to 24-year old in the UK has risen 42 per cent since 2015 to average £18,900. Meanwhile Hamptons data shows that the average rent on a single room has increased only 26 per cent over the same period, with one-beds rising by 30 per cent.
Aneisha Beveridge, head of research at Hamptons, says: “Around 105,000 missing renters are relying on the hotel of Mum and Dad. The number of first-time renters has been steadily falling since 2015, pushed down by the spiralling cost of living and record-breaking rental growth which has stretched affordability to the edge of its limits. Young adults are staying at home for longer in order to save up, with some skipping the rental market entirely and going on to purchase a home instead.”