Some 13.7 million bedrooms in owner occupied homes are currently sat idle and these bedrooms would double the size of the private rental market if they were let to tenants, says the study from flat sharing website easyroommate.
The English housing market is currently suffering a £69 billion black hole with nearly 14 million bedrooms sat unused across the country, it points out.
There are currently 7.7 million households in the private rental sector in England generating rents of £68 billion in rent per year so if the unused bedrooms within owner occupied households were introduced to the market it could more than double the size of the sector.
For the first time since the 1960s there are now more people in private rental accommodation than there are living in local authority and social housing. The number of private housing rentals now stands at 3.84 million compared to 3.8 million for social housing rentals.
This growth has largely been driven by first time buyers struggling to raise a large enough deposit to secure a mortgage having to turn to the private rental sector over recent years. This is put a strain on the supply of rental accommodation and caused widespread growth of average monthly rent prices. Average flat share rents alone have risen 4% over the last year and now stand at £390 per month.
‘The UK housing crisis is being exacerbated by the increasing pressure on the private rental sector. Demand consistently outweighs supply and average rents are rising as a result,’ said the firm’s director Jonathan Moore.
‘The UK also has the issue of millions of homes across the country being under occupied. Many within our ageing population are occupying property that is too big for their requirements. However, the moribund sales market of recent years has left many disinterested in selling-up and downsizing,’ he explained.
‘Even if a fraction of the 13.7 million unoccupied bedrooms were opened up to renters it would help ease the pressure being applied to the current levels of rental housing supply. The additional income this would generate for home-owners would also go a long way towards helping owners with the day to day cost of living and paying the bills,’ he added.
The research shows that London home owners are missing out on the biggest pool of potential rent that could be generated if spare rooms were to be let out to lodgers and flat sharers. The capital has over four million unoccupied bedrooms which could generate rents of more than £28 billion pounds a year if they were let out for 12 months at the average London flat sharing rent of £580.
More home owners might choose to rent out spare rooms if they were aware of the rent a room relief scheme. This government scheme allows home owners to receive up to £4,250 gross income each year from lodgers tax free. However, the relief level has not been updated since 1997 despite rents having risen.
If homeowners were to rent a room to a lodger for 12 months, those in London, the South East, East Anglia and the South West would generate income over the threshold. And this may be holding owners back from putting rooms onto the market.
‘It’s been 16 years since the current rent a room relief threshold was implemented and since then it has never increased. This means that thousands of homeowners would fall outside the tax free bracket if they were to rent a room for 12 months at the average local rate,’ Moore pointed out.
‘Increasing the threshold would tempt more owners to into the market provide much needed accommodation to the private rental sector. Not only would this help ease the burden being placed on rental property, but the savings made by those renting in flat share or lodger accommodation can help build the deposit needed to climb on the sales ladder,’ he added.
