Monday, 14 September 2020

There's one interesting bit in these otherwise fairly meaningless stat's

From The Daily Mail:

* More tenants ditch city living in favour of living in commuter towns and villages
* Between May and August 2020, 34% of tenants wanted at least one more room
* Upsizing costs more with tenants who do so paying £149 more per month
* LonRes survey also found that space and gardens are in demand among buyers

So 34% of tenants rented a slightly larger home after they moved against 25% in the previous quarter? That's not surprising as more people are working from home now, so they need more space at home, and what they save on season tickets or commute costs they can spend on renting somewhere larger.

Plus, in the grander scheme of things, the stock of rented housing and the number of households renting is fairly stable. For every tenant trading up, there's probably one trading down. As Frank points out in the comments, on closer inspection, it might be trickier than this but we don't have that level of detail.

Tenants living in the South East of England are paying the most and have been the most likely to trade up, with 47 per cent of those moving post-lockdown adding at least one bedroom in their move. On average they are spending an additional £266 per month.

Yes, rents and prices in London are high to reflect the fact that wages are higher there, rents in the rest of the South East were slightly lower - people lived there but commuted into London, so the rents were depressed by commuting costs (Von ThĂĽnen's law of rent). Also, London was great for socialising, meetings, concerts and so on, but that has all fallen by the wayside now. Tenants' total rent-plus-commuting costs has probably gone down a bit, on average (assuming two adults commuting).

So far, so blah. Here's the interesting bit:

Renters remaining in the capital are benefiting from renters leaving in their droves for commuter towns and villages. It means, the average London-based tenant looking for more space spent £86 per month less, despite gaining at least one extra bedroom.

We'd expect that to happen, but it's nice to have confirmation of how big the fall is. £86 less for one extra room looks like about one-third less in space-adjusted terms, although HomeLet's August index says that London rents are only down by 2.1% year-on-year. Which I suppose is another interesting bit, how can two sources differ so wildly?


Robin Smith said...

Heard of fake news?

It's where the real story, has context removed, to match the required narrative.

The US election thrives on it

Bayard said...

"Fake News" has, in the space of five years or so, changed in meaning from "sensational but fabricated stories designed to act as clickbait" to "something that the speaker / writer wishes their audience not to take any notice of, regardless of its veracity. Like "conspiracy theory" it no longer means anything else.

Robin Smith said...

And Trump gets it so right

Mark Wadsworth said...

RS, no, I've never heard of "fake news". Is Bayard's definition accurate? If so, what relevance does this have to the stat's quoted in my post?

Bayard said...


Frank said...

"Plus, for every tenant trading up, there must be one trading down."

Not necessarily. E.g. if I decide I don't need my 10 bedroom mansion and move to a one bedroom flat, then a person in a 9 bedroom house can move up to 10, 8 can move up to 9, 7 to 8, etc. Nine tenants trades up, one trades down.

The person at the top might not trade down at all, there's a number of ways they could move out of the rental market: death, emigration, buy a house instead of renting, decide they don't need to rent so many houses...

Mark Wadsworth said...

F, true and fair point. But that's a possible but slightly unlikely scenario. I mean on average and one the whole, it's one-for-one.

Frank said...

Mark. It was your use of the word "must" that set me off. As I demonstrated, one up, one down doesn't even follow if you assume a static population of renters. Once you realise that the renting population is ever changing it becomes even less valid.

Mark Wadsworth said...

F, again, fair point, I have amended the wording.