Young adults moving out after the pandemic pushed rents up
Demand for rental homes remains high, putting upwards pressure on rents
A 300,000 surge in young adults moving out of their family homes during the pandemic increased rental demand and led to a rise in rent, analysis has showed.
Generation Rent looked at figures from the Office for National Statistics (ONS) and found that in June 2019, 6.66 million 15 to 34-year-olds lived with their parents, accounting for 40.1 per cent of people in this age group.
When offices and universities closed due to lockdowns, people moved back in with their families and by June 2021, this figure rose to 6.97 million, or 42.3 per cent of people aged 15 to 34.
300,000 young adults moving out of their parents’ homes added to rental demand since the end of pandemic restrictions in 2021, which has allowed landlords to name their price.
When lockdown measures started to be lifted, the number of people aged 15 to 34 living with their families dropped by 307,000.
Generation Rent also found that the size of the deposit protection system increased by 101,000 in 2020 to 2021, which was 50 per cent down on pre-pandemic averages of 150,000 each year. However, this surged in 2021 to 2022 by 217,000 and rose again in 2022 to 2023 to 226,000, suggesting more renters had joined the market.
A drop in rental demand did cause average rents to fall in the 12 months to 2021, but this rebounded in 2021 to 2022 with a 12.3 per cent rise in average rents across the UK.
The organisation said this contradicted the idea that rents had gone up because of low stock.
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This was reflected by the English Housing Survey which showed that there were 178,000 more private rental homes in England between 2020 to 2022.
Generation Rent said tenancy deposit data showed that tenants were less likely to move from their properties than they were before the pandemic. It said this was first because of restrictions and uncertainty, but more recently because of higher rents.
This insight was based on the proportion of tenancy deposits being returned to renters, which came to 31 per cent in the year to March 2023, compared to 40 per cent in 2019. However, this was slightly higher than the 28 per cent of deposits that were returned in 2021 to 2022.
The organisation said the lack of movers meant there was more competition for empty properties.
Generation Rent said: “The failure to build enough homes in recent decades has left the country unprepared for the huge spike in demand since the end of restrictions. The failure of the welfare system to respond to rising rents has left renters on low incomes even more exposed to the cost of living crisis.”