Save-to-buy renters could put £210 on average towards their deposit each month by flatsharing, with Newcastle offering the best value being only 11% more expensive for a two-bed than a one-bed flat
Average asking rents rose in all regions in 2015, an annual increase of 3.8% outside Greater London and an extra burden for many renters trying to save up a deposit to buy a home
Average 2015 asking rent increase in the East of England outstripped all other regions, up by 6.5% year-on-year compared to a muted 0.5% increase in London
Record Christmas and New Year traffic on Rightmove for both sales and lettings indicates strong demand for 2016, with page views on both Christmas Day and Boxing Day up 22% on 2014
Most popular rental searches over Christmas and New Year outside London were in Bristol, Birmingham and Manchester, all of which saw strong rent rises in 2015
In spite of the traditional seasonal fall in Q4 compared to Q3, all regions ended 2015 with an annual rise in the average asking rent, further stretching tenants’ finances. New research using the largest rental data set in England and Wales reveals that renters could save on average £210 per month outside London if they flatshare with one other person rather than rent a one-bed.
Newcastle is the most cost-effective place to share a two-bed flat, with a renter potentially saving almost half of the rent they would fork out for a one-bed. A one-bed flat in Newcastle is £553 per month, and a two-bed flat is £614 per month, only 11.1% more expensive. This means a possible saving of £246 per month if a renter chooses a two-bed with a housemate instead.
Sam Mitchell, Rightmove’s Head of Lettings, comments:
“The potential saving of renting and sharing a two-bed rather than a one-bed flat is before factoring in reduced costs from splitting the bills. It could be a good option for renters looking to save up for a deposit to buy or other financial commitment. The Government has various well-publicised initiatives to encourage the home-ownership that some tenants would love to achieve, and while sharing can have its pitfalls it is a potentially lucrative solution.”
After Newcastle the best value areas for moving from a one-bed flat to a two-bed are neighbouring Gateshead (11.3% more expensive to rent a two-bed), followed by Swindon (16.9% more expensive), Bracknell (18.7% more expensive) and Milton Keynes (20.5% more expensive).
“Demand from tenants is at an all-time high and the amount of properties available to rent hasn’t been keeping pace. This has led to more people considering house sharing, a trend that is already very common in London and now growing in other areas. Rather than look at house shares or studios, tenants could team up with friends and look at bigger flats in some of these best value areas, they just need to make sure they’re aware of their legal obligations when signing a joint tenancy agreement. For those that want to buy but are struggling to save a deposit this could help speed up the savings process.”
2015 ended with an annual increase of 3.8% in asking rents outside London, with the East of England leading the rent rises, up 6.5%. All regions saw a year-on-year rise, with the most modest rate of growth in London at 0.5%, where it appears many tenants have hit their affordability ceiling.
Demand was strong during the festive break with Rightmove recording its busiest ever Christmas and New Year traffic for both sales and lettings properties, a 22% increase in page views on both Christmas Day and Boxing Day compared to 2014. On Boxing Day there were almost 31 million page views on the site, rising to 44 million on 30th December as more people made use of their holiday to house-hunt.
A further indication of ongoing high demand and upwards price pressure is that the most popular rental searches over the festive period after London were in areas that reported strong growth in rents in 2015: Bristol (+9.2%), Birmingham (+8.4%), Manchester (+7.0%) and Leeds (+6.1%).
“After a 7.8% annual rise in London asking rents last year, a slowing of the rate of growth was due, as more and more tenants found their affordability stretched. Outside the capital last year rents rose by just 0.3%, so this year’s 3.8% could be a result of more professional renters moving into areas outside of London, to sought-after cities like Bristol and Birmingham. Looking ahead to 2016 it’s likely there will be an initial injection of supply onto the market as investors rush to complete purchases before the stamp duty change in April, so renters thinking about moving could find they have a better choice early in the year. From April onwards we could see a restriction in supply which could feed through into even higher rents.”
Scott Hudson, Lettings Director at Ocean Home in Bristol comments:
“The high employment levels and the extremely strong and vibrant economy in Bristol has led to ever increasing demand for rental properties in this area, especially from professionals moving from other cities. This has led to more professionals teaming up and looking for bigger flats as a more cost-effective way of renting in the city.”