More young people than ever are moving out of their family homes across the UK to rent a property in London, pushing rental prices up in the capital - yet the average age of tenants in this region is lower than anywhere else in the UK, new research says.
The September HomeLet Rental Index shows that the number of people moving into a rented property from outside London, who either lived at home or in a property they owned, has leapt from 61% of all new tenancies in the capital in September 2009, to 86% in September 2011. With average wages of tenants also increasing to £35,003 – which is around 25% higher than the national average - it suggests young professionals are moving into London once finishing their studies to work and benefit from the higher salaries the City can offer.
The HomeLet Rental Index also exclusively revealed that once these young tenants have worked and lived in London for just under two years they are then inclined to move out of the capital to either purchase their own home or move in with a partner. This is shown in the sharp decrease in both average tenancy lengths in the capital, combined with a drop in the number of people moving from a rented property in London to another rented property anywhere in the UK.
At the same time, HomeLet’s statistics also show an increase in the number of tenants who lived with their parents in London are being forced to move into rented homes outside the capital. With the average cost of renting a home in London increasing again - now standing at £1,206 per month, which is 53% higher than the UK average – this suggests the children of London-based residents who want a space to call their own are having to move to other parts of the UK where it is significantly cheaper both to rent a home, and manage increasingly expensive living costs.
John Boyle, Managing Director of HomeLet, said “The fact that more young people are moving into the city from other parts of the UK, yet are living there for a shorter period of time implies they’re finishing university, going back home to their parents for a few years and then setting up home in London for work – before moving away from the Private Rented Sector after an average of two years, perhaps to set up a permanent home.
“However, with the same London tenants spending more than half of their income on rent, it seems resident Londoners are being forced to move out of the city and rent a home elsewhere. It’s interesting to see how this movement has caused the average age of tenants in London to decrease.
“With jobs hard to come by in many areas of the UK, younger tenants may be moving to London to find work. These tenants might be more willing to share a property or in some cases share a room. With a higher number of tenants in a property landlords could get a better return on their investment. But with demand for rented properties at extremely high levels it’s important that standards do not deteriorate in the Private Rented Sector and that tenants’ are treated fairly.”