High rents mean young people are less likely to move to UK cities where average salaries are higher, a new report suggests.
The number of young people in private rented accommodation who moved for a new job has almost halved in 20 years, and that is largely because despite the higher wages available, financial incentives for moving are generally lower, research suggests.
Lindsay Judge of the Resolution Foundation,, which undertook the research, said: “Pay gains are being swallowed up by high housing costs.
“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 Resolution Foundation found that rents had climbed the fastest in higher-paying areas of the UK.
Private rents have almost doubled since 2017 in the UK’s highest-paying local authority areas, while rents have increased by just over 70% among the lowest-paying local authority areas during the same period of time.
But while the Resolution Foundation believes that the number of households facing affordability issues with their housing costs has increased most in the rental market, the Residential Landlords Association (RLA) argues that 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.
David Smith, policy director for the RLA, said: “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.”
According to the Royal Institution for Chartered Surveyors (RICS), the average annual rent rises are likely to be around 3% per annum for the next five years as a result of the demand for rental properties continuing to outstrip supply.
Government statistics show that 10% of private landlords representing 18% of tenancies are already planning to decrease the number of properties they rent out, whilst 5% of landlords, representing 5% of tenancies, plan to sell all of their properties. Recent stamp duty statistics point to investment in the sector slowing up.
“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 this,” Smith added.