More tenants stay at home thanks to rising rents

Rising rents mean the share of tenants leaving the family home has been steadily declining across Great Britain since 2015, Hamptons research has revealed.

Back then, first-time renters made up 6.1% of all tenants who moved into a new home which equated to 71,860 new rented households in England.

During the first five months of 2023, that figure has fallen to 4.6% which equates to around 43,280 new rented households in England this year.

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.

Aneisha Beveridge, head of research at Hamptons, said: “Around 105k 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.

“The good news for tenants is that rental growth is starting to cool, and we expect that to continue throughout the remainder of the year. Average rents across Great Britain have risen 47% over the last decade, underperforming house price growth of 69% over the same period.

“However, the key issue, is that over half of that rental growth has occurred within the last four years. And this has come at a time when household incomes are under pressure from other rising costs. That said, many landlords are also facing similar pressures, and this is one of the key factors underpinning rental growth this year.”

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 Great Britain is set to save £12,290 by continuing to live rent-free with parents this year.

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% of all renters in the North of England (North East, North West and Yorkshire & The Humber), compared to 3.7% of those renting in the South of England (London, East, South East & South West).

In May the average rent on a newly let home in Great Britain rising 9.1% year-on-year, down from 11.1% in April.