Monthly rent for a room in a flatshare expected to reach nearly £450 by December 2013
Retirees looking for a short-term accommodation during downsizing process drives rise in the grey lodger market
The cost of flatsharing in the UK will rise 4.3% by the end of 2013, according to flatsharing website easyroommate.co.uk.
Research carried out by easyroommate.co.uk showed falling numbers of rooms available to rent and consistent demand from renters in the flatshare market has caused average rents to grow by an average of 0.35% a month since January 2012. With the supply and demand trends showing no sign of reversing, flatsharers can expect rents to grow 4.3% over the course of the year. Average rents are expected to reach £448 per month by December 2013 compared to the current average of £430 per month. This expected increase to rents will drive up the average annual flatshare cost by £219.
Since January 2012 the number of bedrooms available for flatsharers to rent has fallen by over two fifths (44%). Over the same period demand has remained steady and this has put even more strain on an already stretched supply of rooms. This supply and demand imbalance has caused rents to rise 3.6% (£415 to £430 per month) since January 2012.
Jonathan Moore, director of easyroommate.co.uk, said:
The last few years have been tough for renters and 2013 will be no different. Falling numbers of rooms available to rent is putting strain on supply and leading to higher and higher rents. Flatsharing remains a much more cost-effective option for renters but anyone hoping to rent a room this year needs to be aware of the rising costs and factor this into their budgeting.
At a regional level, The West Midlands has seen the largest rise in average flatshare rents over the last twelve months. If this rate of growth continues, flatsharers in the West Midlands can expect to see average rents end 2013 3.9% higher than their current level. It’s a a different story for sharers in Wales who have seen the largest fall in average rents with prices dropping 2.6% over the same period. If this trend continues flatshare rents in Wales will fall a further 3% this year. London has seen rents stay relatively flat over the last year with average monthly prices growing only 0.3%. The same growth this year will see rents rise 0.7% by the end of 2013.
Rise of the Grey Lodger
There has been a significant rise in the number of retired flatsharers over the last year. Since January 2012, easyroommate.co.uk has seen the number of retirees looking for short-term flat-share accommodation. Over the last 18 months the number of retired enters has increased by over a third (34%).
Over this period the average desired rental period specified by retirees hoping to flatshare has fallen from over six months to just over four months. This drop in the average length of stay combined with the rise in the number of retired renters suggests more retirees are using flatsharing as a cost-effective stop-gap during the downsizing process.
3.2m homeowners plan on downsizing properties in order to help fund retirement[i] and many of these will need short-term accommodation if they have sold their home but have been unable to a find suitable downsize property to purchase.
Jonathan Moore said:
The finances of those about to retire and those in the early stages of retirement have taken a serious knock over the last few years. Many of these retirees have equity locked in their homes which they need to access to boost their retirement income. With the sales market in such a sorry state, downsizing is not a straightforward process and many find themselves needing to find short-term accommodation between selling their properties and finding a new home.