£1.3bn lost to the PRS by renters staying with Bank of Mum and Dad

The average would-be tenant is set to save £12,290 by continuing to live rent-free with parents this year – costing the PRS a whopping £1.3bn.

Boy moving in with Mum and Dad

Rising rents mean the share of tenants leaving the family home has been declining across Great Britain since 2015 with first-time renters accounting for just 4.5% of new tenancies so far this year, research from Hamptons reveals.

In 2015 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.

Hamptons Chart 1 - share of renters who left family homeBut in the last five months that figure has fallen to 4.6% – around 43,280 new rented households in England this year (see chart 1 and table 1).

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.

WHOPPING

But with the average rent paid by someone leaving the parental home passing £1,000 pcm for the first time, the average would-be tenant is set to save £12,290 by continuing to live rent-free with parents this year via the Bank of Mum and Dad – saving would-be first-time English renters a whopping £1.3 billion in 2023.

Those who left home paid an average of £1,024 pcm on their new place in Great Britain so far this year, up from £925 pcm in 2022 which will cost them an additional £1,190 each year.

Ten years ago, they spent an average of £642 pcm when leaving home, which equates to 37% or £4,580 in total each year less than today.

Aneisha Beveridge, Hamptons
Aneisha Beveridge, Hamptons

Aneisha Beveridge, Head of Research at Hamptons, says: “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.”

NATIONWIDE

Nationwide Building Society has returned to lending at 95% LTV on non-new build flats on Friday last week.

The Society reduced its maximum LTV for flats (excluding new-builds) to 85% at the height of the pandemic due to concerns about the economic conditions at the time.

The change will be beneficial for first-time buyers, with 25% purchasing a flat in 2022.

Nationwide already lends at 95% LTV for new-build flats via its Deposit Unlock scheme.


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