Why is finding a house share such a nightmare right now?

‘I’m still traumatised,’ says 37-year-old artist Kate*, who recently embarked on the house hunt from hell with two friends. ‘It’s crazy out there. Some places went before anyone had even seen them. We only found somewhere because we offered them the first three months rent on top of a deposit, which wiped out our savings.’

‘I got a job in London so I had to find a place there immediately,’ says 22-year-old graduate Sam. ‘Places in house shares went really quickly, so eventually I just agreed to one I hadn't seen. The room turned out to be the size of a cupboard and full of mould, so it was suffocating to be in there.’

These stories will sound only too familiar if you’ve been hunting for a house share in the capital recently. Last year, the UK rental market neared boiling point as tenants returned to cities after the pandemic. Now, the cost of living crisis has pushed costs higher still, as the housing supply dwindles. The average London rent for a room in a house share has hit a record high of £935, a 22 percent increase on last year. Now, 72 percent of UK house-sharers are considering moving to a new area to escape high rents. And 97 percent of renters are (understandably) anxious about finding a new place in the middle of a rental crisis. But why are flatshares particularly impossible right now? Is it part of London’s general slide into unaffordability, or is there something new going on?

There’s no place like HMO

For Kate, it feels like London is particularly down on house-sharers right now. ‘All the listings seem to say ‘‘it's a lovely family home,’’ which is code for ‘‘no house-sharers’’,’ she said. ‘Eventually, we got tired of it, so we lied and said we were a family: my friend and I pretended to be a couple, and we said our third friend was my cousin who was staying with us. They seemed to accept that.’

It’s the kind of farcical set-up right out of 1999 sitcom ‘Spaced’, where house mates Daisy and Tim have to pretend to be a ‘young professional couple’ to appease their snobbish landlord. Only what’s new is not just the sums of money involved (the ‘Spaced’ house recently sold for a whopping £4 million). It’s also the changes in legislation that mean that landlords have to pay extra for letting to house-sharers.

HMO means Home under Multiple Occupation, a class of property that comes with extra government restrictions around fire safety and minimum room size. Traditionally, landlords only needed HMO licenses for properties with six or more unrelated residents. But over the past two years, local councils across London changed the rules so any properties housing more than two unrelated tenants require an HMO license: a mandatory HMO for homes shared by five or more people, or an additional HMO for homes shared by three or four. The scheme comes with a hefty admin load and fee: in Ealing, for example, an additional HMO licence lasting five years costs £1,100 plus £50 per habitable room. 

‘I agree that renters rights are important,’ says Amy. ‘It’s just a shame it comes with such a high price tag. Landlords just pass on the cost, and renters end up having to pick up the bill.’

Landlords just pass on the cost and renters end up having to pick up the bill

After a year paying over the odds to stay in a mould-infested HMO that her landlord refused to fix, 22-year-old renter Sarah agrees. ‘I don't think tenant rights are well protected in HMOs,’ she said. ‘I know that landlords have to have a property inspection every few years to keep their HMO licence but that doesn’t seem frequent enough.’

Still, when we asked the Mayor of London’s office about this criticism, they said: ‘HMO licensing is a vital national requirement that exists to keep private renters safe in their homes. Lowering standards is not an acceptable response to the cost of renting in the capital.’

That’s only the start of it. There are heaps of other reasons why renting has suddenly become so unaffordable.

A renters’ traffic jam

Once, renting was seen as a transient state for most people. New renters entered the market each year, and plenty more left it. But as estate agent Amy Warrington-Stanley explains, that’s all changed: ‘people are holding off buying homes for longer because of mortgage increases and the high cost of living, so there are more families looking to rent.’ Inevitably, that pushes up prices.

Stats from Spareroom.com show another side of the problem. Three in four renters have delayed finding a new place, despite wanting to move, because of high rents – and that means fewer fresh properties are becoming available.

With a massive shortage of house shares on offer, inevitably it’s the lowest income renters who are struggling the hardest, without the connections or budget to escape rogue landlords. ‘My room was the size of a cupboard, and I couldn’t even close the window,’ says Sam, who chose the cheapest room he could find. ‘I’d sleep with two jumpers, a hat and gloves because it was so cold at night.’ He and his former housemates are currently suing their old landlord to get their rent back in full using law firm Renters Alliance, which specialises in HMO violations. With its help, they discovered their landlord only had a HMO licence for four tenants, instead of the five that were paying to live there.

HMO legislation offers tenants like Sam protection against rogue landlords. But wouldn’t it be better if HMO rules were enforced and understood widely enough to stop tenants getting into dodgy rentals in the first place? Few tenants understand their rights, leaving organisations such as London Renters Union and Shelter with a massive task of filling people in. 

And although few people are crying themselves to sleep over the struggles of HMO landlords, many of them are finding that buy-to-let properties aren’t the cash cow it once was. Mortgage rates are soaring. And a raft of government legislation has eaten into their incomes. In 2016, buy-to-let landlords were hit with a three percent stamp duty surcharge on their properties. In 2017, new legislation scrapped mortgage tax relief on rental income. Then, the Renters Reform Bill scrapped so-called ‘no fault’ evictions, meaning landlords needed a valid reason to kick tenants out. With profits down and desperate tenants everywhere, the temptation is higher than ever for rogue landlords to cut corners.

What can you do?

There’s a paradox at work here. Local and national government legal changes are making it harder for landlords to get rich off the back of house share tenants, which can only be a good thing. But at the same time, these measures are also causing buy-to-let landlords to exit the sector in droves, leaving house-sharers with fewer and fewer options. For estate agent Warrington-Stanley, surviving the current house share market means working fast: ‘do a video viewing, and put down a deposit as soon as you can.’ But Sam’s experience suggests that signing up to properties without physically seeing them isn’t a great idea.

Maybe the answer is to metaphorically kick Kirstie and Phil in the shins by ignoring their motto that ‘location, location, location’ is everything. ‘I often have people who are very set on specific areas,’ says Warrington-Stanley. ‘Sometimes they need to branch out, get out of their comfort zone, even if it might be five minutes extra to get to work’.

Nearly half of under-24s are planning to leave London within ten years

Or maybe the answer doesn’t involve hitting the suburbs: currently, the mayoral office is campaigning for a halt to London’s spiralling housing costs. ‘To tackle rising rents, the Mayor has repeatedly called on the government for the powers to urgently introduce a two-year rent freeze in the capital, alongside boosting the supply of genuinely affordable homes,’ said a spokesperson, calling on the government to ‘invest the £4.9bn a year required to deliver the scale of affordable housing that is needed’. It’s a big ask. But the alternatives look pretty dire.

A recent YouGov survey showed that nearly half of under-24s are planning to leave London within ten years, blaming property prices and the cost of living here. As Kate puts it: ‘people want to move to London because they want to be part of a creative community, because they’ve got big dreams – that’s a huge part of its culture. It would be a shame to lose that, because house shares are unaffordable.’

*Name has been changed.