Rising rents are making young people less likely to move to
UK cities, where average salaries are higher, a new report from the Resolution
The number of young people living in private rental housing
who moved for a new job has almost halved in 20 years.
Despite the higher wages available, financial incentives for
moving are lower, researchers say.
“Pay gains are being
swallowed up by high housing costs,” claims the Resolution Foundation’s Lindsay
Judge. “For young people,
in particular, there are real advantages to moving when it comes to trying new
roles and developing skills – and housing should not be a barrier that prevents
them doing this.”
Although unemployment has fallen, the think tank found that rents have climbed the fastest in higher-paying areas of the UK.
Private rents have increased by almost 90% in the UK’s
highest-paying local authority areas, while they’ve risen by just over 70%
among the lowest-paying locations.
In 1997, after housing costs were deducted from
salaries, private tenants moving from a low-paying area (such as East Devon) to
a mid-paying area (like Bristol) would have received an average financial gain
of about 16%. Today, that would be a mere 1%.
Of course, millennials and generation Z have other
reasons for not moving, aside from money.
Some people prefer to live near to their parents and
friends, while others may find it harder to relocate because of their children.
to the report, David Smith, the Policy Director of the Residential Landlords
Association, warns: “The biggest threat to rent
levels are the policies being pursued by the Government, which are choking off
the supply of homes for private rent, as demand is increasing. We warned ministers
that this would happen, but they have not listened.
“Instead of attacking the
private rented sector, we need pro-growth policies that recognise the need for
more homes of a good standard and at an affordable rent. Making renting less
attractive for landlords will not make a substantial difference to the
availability of property. We must focus on building more homes to address
The Royal Institution of
Chartered Surveyors has raised concerns that average
annual rent rises will likely be around 3%
for the next three years, as a result of demand for rental housing continuing
to outstrip supply.
Government data shows that
10% of private landlords, representing 18% of tenancies, are already planning
the number of properties that they let, while 5% of landlords,
representing 5% of tenancies, plan to sell all of their properties.