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Monday 14 November 2016
The number of tenants with a spare room has fallen to the lowest level on record. Just one in three tenants (35%) let a home with a spare bedroom in 2016, down from a peak of 59% in 2010 (see table 1). In London, where rents are highest, just 26% of tenants were able and willing to pay for an extra room this year, slightly down on 2015 (see chart 1). As rising rents have pushed the cost of an extra bedroom to £295 a month (see table 2) tenants have increasingly shied away from paying for space they don’t absolutely need.
Renters in the capital are least likely to have a spare bedroom, but the figure is very similar for tenants in big cities across the South of England. Fewer than three in ten tenants in Oxford (28%), Cambridge (27%) and Bristol (24%) have a spare room (see table 2). But in cities further north like Newcastle, Manchester and Liverpool where the cost of an extra bedroom is much lower, tenants are nearly twice as likely to have a spare room (see table 2). Those living in city centre flats are a third more likely to have a spare room than their more suburban counterparts.
The cost of a new let rose 1.0% across Great Britain in the last year (see table 3), the slowest October increase since 2010. London and the South East continue to bear the brunt of the slowdown with rents in the capital up just 0.2% over the last 12 months while in the South East they fell 3.0% year-on-year. In October 2016, the average monthly London rent stood at £1,302 compared to £1,300 last year. The Midlands, North and Scotland saw rents up by more than 2.0%.
Commenting, Johnny Morris, Director of Research at Countrywide said: “As affordability pressures have risen, for many tenants, extra space has become a luxury. Sacrificing extra bedrooms and sharing has helped renters to absorb higher prices. But those living in the South are close to a point where there’s not much more room to squeeze, meaning rental growth is likely to be capped by tenants incomes for some time.
“The second half of 2016 has seen the rental market slowly swing towards the tenant. The pace of rental growth has slowed throughout the year. October was the first time in over two years the cost of renting a home didn’t rise faster than the rate of inflation.”
The Countrywide Lettings Index has been running since 2012 and we continually seek to improve its accuracy. From June 2017 the methodology was changed to reduce the impact of seasonality and volatility in the rental market.
While the index remains a mix adjusted series, rent and rental growth figures for each month are now based on a three month rolling average rather than lets agreed in the last month. The most expensive decile of homes let has been excluded to reduce volatility and the mix has been updated to include the most recently published government stock statistics.
The Countrywide Lettings Index uses data from Great Britain's largest letting agent to track changes to the cost of renting. The index is based on the 90,000 homes let and managed by Countrywide in each year, adjusting for their location and type. It is based on achieved rather than advertised rents and the published monthly rental figures are an average of the new lets and renewals of tenancies over a rolling three month period.