An increase in unlicensed ‘houses in multiple occupation’ (HMOs) could be on the cards as tenants look to cut their living costs.
According to research by SpareRoom.co.uk, house shares with six or more bedrooms are the fastest-growing property type.
Over the past year, the website has seen a 59 per cent surge in rooms available in bigger house shares with six or more bedrooms, a 51 per cent increase in rooms in five-bedroom house shares and a 43 per cent rise in rooms in four-bedroom house shares.
In London, SpareRoom’s figures show a 79 per cent hike in rooms in properties with six or more bedrooms and a 74 per cent increase for rooms in five-bedroom properties.
According to SpareRoom’s director Matt Hutchinson, larger flat shares are becoming more prolific in the current financial climate as people look to reduce rental and living costs.
In the UK as a whole, room rents for two and three-bedroom flat and house shares cost an average £426 per month, while rooms in four to six-plus bedroom house shares cost an average £397 per month, a saving of £348 per year.
In London, the average monthly rent for a room in a two-bedroom flat share is £809, but in a house share with six bedrooms or more, tenants will pay £710, a saving of £1,188 per year.
However, Hutchinson warns that this surge in supply could lead to a growth in unlicensed HMOs.
Landlords of larger properties have extra legal responsibilities and must register with the relevant council for a licence if they have five or more unrelated people sharing and the property is at least three storeys high.
Hutchinson said: “Faced with stubbornly high living costs, jobs uncertainty and, in many cases, reduced incomes, renters are increasingly looking to make savings wherever they can, and sharing a larger property with more people is a simple way to do that. Not only is the rent cheaper, but monthly bills are lower when divided amongst a bigger group, too.
“Landlords can reap higher yields from larger properties and tend to rent by the room in bigger house shares, as it can be difficult to find a big enough group of sharers that will move in altogether, unless their property is located in a university town or city and they are targeting the student market.
“Landlords of larger properties should check if they require an HMO licence, so that their property meets the appropriate fire safety standards. There is useful information about HMOs on direct.gov.uk.”
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