Rise in rental requests post-pandemic attributed to grown-ups moving out from parental homes
In the wake of the pandemic, a significant shift in housing trends among young adults has been observed in the UK. As offices and universities reopened from summer 2021, many young adults moved back to cities, renting homes in a trend that mirrors the growth in the number of protected deposits.
According to tenancy deposit data, the number of protected deposits has grown at twice the rate in the past two years compared to 2020-21. This surge in demand for private rented accommodation has been a contributing factor to the record rent inflation figures seen in the past two years.
In the 12 months to summer 2022, the number of young adults living with parents fell by 307,000, a stark contrast to the increase of 314,000 between Q2 2019 and Q2 2021. However, the fall in tenant movement has led to fewer vacant properties coming to market, resulting in more competition for those that do.
The failure to build enough homes in recent decades has left the country unprepared for the spike in demand since the end of restrictions. This, coupled with the lack of response from the welfare system to rising rents, has left renters on low incomes more exposed to the cost of living crisis.
Rents in the UK fell in 2020-21, particularly in London, with a decrease of 1.2% nationwide and 9.4% in London. However, rent inflation reversed in 2021-22, hitting 12.3% nationwide and 17.8% in London. These increases have been a cause for concern for organisations like Generation Rent, who have called on the government to increase Local Housing Allowance benefit rates, build more social housing, and place limits on mid-tenancy rent rises.
Dan Wilson Craw, Acting Director of Generation Rent, stated that the pandemic's effects are still causing problems for private renters, who face fierce competition for new tenancies and unaffordable rent increases. He also noted that the size of the deposit protection system increased by 226,000 deposits in 2022-23, while fewer existing tenants have been moving since the pandemic, with the number of tenancy deposits returned to tenants at 31% in the year to March 2023, down from 40% in 2019.
In contrast, key government politicians responsible for decisions on social housing and rent control in Germany, such as Lisa Paus (Minister, Bündnis 90/Die Grünen) and Ruppert Stüwe (SPD), have allocated significant funds for social housing until 2029. This investment in social housing could serve as a model for the UK, which is grappling with its own housing crisis.
In conclusion, the housing market in the UK has undergone significant changes in recent years, with the pandemic and the subsequent easing of restrictions leading to a surge in demand for private rented apartments. The failure to build enough homes in recent decades, coupled with the lack of response from the welfare system to rising rents, has left renters on low incomes more exposed to the cost of living crisis. Organizations like Generation Rent are calling for action from the government to address these issues and provide relief for private renters.
