In London, where the flatshare population is currently 653,000 Easyroommate forecast a further rise of at least 22,000 new flatsharers in 2012.
Jonathan Moore, director of Easyroommate.co.uk, comments: “The boom in the popularity of flatsharing is the second inevitable step following the mortgage market breakdown. Renters can no longer secure mortgages to become homeowners. This is pushing mainstream rents through the roof, and these buyers are turning to flatshares to trim the monthly cost of renting.
“Cheaper forms of rental accommodation will only become more popular next year as the UK faces a stalling economy and the fallout from the eurozone crisis. Apart from the effect on job prospects and salaries in 2012, it will place a low ceiling on lending to first-time buyers – despite the new government mortgage scheme. As the cost of moving rises with the end of the stamp duty holiday, demand for rental accommodation from frustrated buyers will be higher than ever. When you consider that student populations tend to swell during downturns, we may even see the flatsharing population top three million by the end of next year.”
RENTAL INFLATION FORECAST
With the supply of houseshares rising more slowly than the demand for accommodation, rents will continue to rise. In the past year, rents have risen by 4.8% annually to £365 per month. Easyroommate forecast that rent rises are likely to outstrip inflation in the coming year, with rents to rise by 5% across the UK to £383 per month. Despite this increase, even if wider property rents do not rise beyond their current level, renting a room in a flatshare will be 47% cheaper than renting a whole rental property.
However, in London, where demand and rental inflation has been the strongest in the past year, Easyroommate predict a 10% rise in the average room rent, rising from £520 per month to £572 pcm.
Jonathan Moore comments: “Renting is becoming less and less affordable each month, making it increasingly difficult for renters to afford to live alone. This is driving demand for cheaper houseshares and boosting rents. With the deteriorating economic outlook likely to hit many homeowners’ employment, renting out spare rooms to help pay the mortgage will become an increasingly popular trend. Despite the likely influx of flatshare accommodation, we anticipate that demand for rooms will continue to outstrip the supply, and flatshare rents will continue to escalate in 2012.”
RENTED HOUSEHOLDS TO GROW IN SIZE
As a result of growing rents, the average flatshare household size is increasing, reaching 3.2 people per houseshare in 2011. Based on recent trends, Easyroommate forecasts that the average houseshare size will rise again to hit 3.3 by the end of 2012.
Jonathan Moore comments: “As the cost of living sky-rockets, houseshares are growing as flatmates trade off less space for cheaper rents and lower utility bills. Sharing a home with three or four flatmates is no longer limited to the presence of students, as young professionals are move into larger households in a bid to spend even less on accommodation. Many landlords are seeing the financial potential of renting out rooms separately, and we expect the supply of larger flat and houseshares will steadily increase in the coming year. ”
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