New research from HomeLet suggests that soaring living costs, an increase in youth unemployment and the continuing difficulty in getting on the property ladder may be forcing people to stay at home for longer and remain in the Private Rented Sector for longer.
According to the latest HomeLet Rental Index, over the last two years there’s been a 10% increase in the percentage of new tenants entering the Private Rented Sector aged 18-35 who previously lived at home. In September 2009 just 44% of tenants under the age of 35 had previously lived at home. In September 2011 this figure has risen to 54%.
This trend is most noticeable in the 18–21 year old age group. In September 2011 the percentage of 18-21 year olds moving from one rented property to another was just 16%. This figure has halved since 2009 when it stood at 30%.
The dramatic rise in youth unemployment, which increased by 78,000 to 973,000, (source: Office of National Statistics), and an increase of 4.5% in average rents, when compared to September 2010, reflects how younger people are feeling the squeeze more than anyone else.
John Boyle, Managing Director of HomeLet said, “Our data shows that average tenant income levels are not increasing at the same rate as rents. With the sharp increase in youth unemployment and inflation at high levels the prospect of buying a home is a distant dream for many. But for some younger people, particularly those without jobs, renting may also be too expensive, forcing them to stay in the family home for longer.
“Although we’ve seen a reduction in the percentage of younger tenants moving from one rented home to another, we’re still seeing high volumes of younger tenants entering the Private Rented Sector. In the past many younger people living at home may have moved directly into the sales market. But with deposits high and confidence in house prices low, the Private Rented Sector is still providing a viable alternative to home ownership whilst helping to increase social mobility.
“Our latest data really reiterates the term ‘Generation Rent’, as the Private Rented Sector expands it will become home to an increasing number of younger tenants who might traditionally have moved directly in to the sales market. And with the average age of first time buyers increasing the Private Rented Sector will also provide a home for younger tenants for longer periods of time than we’ve ever seen in the past.”