The Hamptons Letting Index for May showed that first-time renters made up 4.6% of new tenancies for the first five months of the year, equating to 43,280 rented households in England. 

This compares to first-time renters making up a 6.1% share of new tenancies during the first five months of 2015, which accounted for 71,860 homes at the time. Hamptons said the share of tenants leaving the family home had been steadily dropping since this year. 

Hamptons said if people had moved out of the family home into rental accommodation at the same rate as in 2015, there would be an additional 104,550 households looking to rent between 2016 and 2023. 

Aneisha Beveridge, head of research at Hamptons, said: “Around 105,000 missing renters are relying on the hotel of Mum and Dad. The number of first-time renters has been steadily falling since 2015, pushed down by the spiralling cost of living and record-breaking rental growth which has stretched affordability to the edge of its limits.  

“Young adults are staying at home for longer in order to save up, with some skipping the rental market entirely and going on to purchase a home instead.” 

Southerners staying home 

People from the south of England are more likely to stay home, as new renters made up 3.7% of new tenancies across London, the South East and the South West. 

Meanwhile, in the northern regions, 5.4% of first-time renters made up new tenancies. 

Rents rising

In April, the average rent outside of London surpassed £1,000 for the first time and so far this year, renters have paid £1,024 on rent each month. Hamptons said those living rent-free with their parents would save £12,290 a year by doing so. 

Compared to 2022 when the average monthly rent was £925, this is an additional cost of £1,190 each year for renters. 

The overall rate of rental growth slowed down in May with a 9.1% annual rise, compared to an 11.1% growth in April. 

Beveridge added: “The good news for tenants is that rental growth is starting to cool, and we expect that to continue throughout the remainder of the year. Average rents across Great Britain have risen 47% over the last decade.   

“However, the key issue is that over half of that rental growth has occurred within the last four years. And this has come at a time when household incomes are under pressure from other rising costs. That said, many landlords are also facing similar pressures, and this is one of the key factors underpinning rental growth this year.”