London's sky-high prices thin the ranks of room-to-rent seekers
[LONDON] The number of people looking for a room to rent in London has continued to slide, data from a property search website show, in a sign that high rents are pushing even that modest goal out of reach for many residents.
The cost of renting a room in the capital has held above £1,000 (S$1,726) a month since 2022, when property seekers idled by Covid-19 flooded back into the market as the economy reopened.
But the number of would-be flat sharers has declined steadily since and last month hit 57,600, a drop of about 6,500 from a year before, according to figures shared by SpareRoom, a rental website. That's half as many as there were at the peak in September 2022 and marked the slowest May – one of the busiest months for house hunters – since 2021.
The drop comes as the outlook is being darkened by rising bills, a deteriorating labour market and the US trade war, which is showing some signs of undermining confidence in the economy.
Some of the decline in room-rental demand may be due to prospective homeowners resuming their searches as the Bank of England lowers interest rates. But the larger driver is likely the fact that many young people are opting for the cheaper option of living with their parents instead: An analysis by the Institute for Fiscal Studies showed that almost a third of UK residents aged 25 to 29 lived at home in 2024, up from just one in five in 2007.
That may reflect the worsening job prospects for some young people as employers cut back on entry-level positions and recent tax hikes exert a drag on hiring in the hospitality sector. SpareRoom said that 40 per cent of those under 25 spend more than half of their income on rent, well above what's considered affordable.
'All those people in their 20s who would be driving up demand just aren't there,' said Matt Hutchinson, director at SpareRoom. 'Many young people can't afford to rent or save the required deposit on today's starting salaries so they have no choice but to stay put.' BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
an hour ago
- Straits Times
Transatlantic airfares fall as Western Europeans skip travel to US
This summer, price of round-trip tickets from US to Europe are down 10 per cent year on year. PHOTO: AFP - Airfares from Europe to the United States have dropped to rates not seen since before the Covid-19 pandemic, as travellers from Western Europe lead a pullback in travel to the US that is expected to continue through at least July. Overseas arrivals to the US fell 2.8 per cent in May from a year ago, according to preliminary data from the US National Travel and Tourism Office (NTTO) within the US Department of Commerce. Travel from Western Europe fell 4.4 per cent in May, although travel from Eastern Europe rose 4.6 per cent in the same period. Forward bookings suggest sustained declines are on the horizon, with total inbound bookings to the US in July down 13 per cent year on year, according to OAG Aviation, an analytics firm. Transatlantic airfare has been declining since the first quarter when Europeans started reconsidering travel to the US after President Donald Trump suggested annexing Greenland, launched a global trade war, and issued orders that focus on stricter border policy. A stronger US dollar has also deterred some trips. In March, travel from Western Europe fell 17 per cent year on year, according to the NTTO. Average round-trip economy airfares for over 50 routes from the US to Europe in the first quarter were down an average of 7 per cent year on year, with rates to fly between Atlanta, Georgia, and London, down 55 per cent, according to data from Cirium, an aviation analytics firm. As American consumers have been bargain-hunting and waiting closer to their departure dates to finalise travel plans, the decline in demand from Europe is another factor contributing to cheaper travel. 'Fewer seats filled by European travellers to the US, and a slower pace of growth in US outbound to Europe than last year, will tend to cast 2025 as a tougher year to make money on transatlantic routes,' said Mr Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics. Travel booking app Hopper said that this summer, the price of round-trip tickets from the US to Europe is down 10 per cent compared with a year ago. Average fares of US$817 (S$1,051) per ticket are in line with prices to Europe in the summer of 2019, before the Covid-19 pandemic. Major carriers, including Air France KLM and Germany-based Lufthansa, expect slowing activity. Lufthansa chief executive Carsten Spohr said the company expects weaker demand in the third quarter, while Air France KLM CEO Ben Smith said the company is seeing a 'slight pullback' in transatlantic traffic and will slash prices to keep cabins on its transatlantic flights full. Airlines including Lufthansa and US air carrier United Airlines say higher demand from US travellers flying to Europe is offsetting the decline of Europeans flying the opposite direction. United said international bookings from Europe fell 6 per cent in the first quarter, but added that US-originating demand made up for the pullback. Rival Delta Air Lines said 80 per cent of its long-haul international demand originates from the US, and fares in the region are 'significantly higher' than in the rest of the world. Lufthansa said it plans to market its transatlantic flights to more Americans given the higher demand, despite travel from Western Europe showing moments of recovery. Travel from the region to the US increased 12.1 per cent in April before falling again in May, according to data from the NTTO. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
5 hours ago
- Business Times
London's sky-high prices thin the ranks of room-to-rent seekers
[LONDON] The number of people looking for a room to rent in London has continued to slide, data from a property search website show, in a sign that high rents are pushing even that modest goal out of reach for many residents. The cost of renting a room in the capital has held above £1,000 (S$1,726) a month since 2022, when property seekers idled by Covid-19 flooded back into the market as the economy reopened. But the number of would-be flat sharers has declined steadily since and last month hit 57,600, a drop of about 6,500 from a year before, according to figures shared by SpareRoom, a rental website. That's half as many as there were at the peak in September 2022 and marked the slowest May – one of the busiest months for house hunters – since 2021. The drop comes as the outlook is being darkened by rising bills, a deteriorating labour market and the US trade war, which is showing some signs of undermining confidence in the economy. Some of the decline in room-rental demand may be due to prospective homeowners resuming their searches as the Bank of England lowers interest rates. But the larger driver is likely the fact that many young people are opting for the cheaper option of living with their parents instead: An analysis by the Institute for Fiscal Studies showed that almost a third of UK residents aged 25 to 29 lived at home in 2024, up from just one in five in 2007. That may reflect the worsening job prospects for some young people as employers cut back on entry-level positions and recent tax hikes exert a drag on hiring in the hospitality sector. SpareRoom said that 40 per cent of those under 25 spend more than half of their income on rent, well above what's considered affordable. 'All those people in their 20s who would be driving up demand just aren't there,' said Matt Hutchinson, director at SpareRoom. 'Many young people can't afford to rent or save the required deposit on today's starting salaries so they have no choice but to stay put.' BLOOMBERG
Business Times
8 hours ago
- Business Times
Going viral on TikTok helped Pitstop Tyres clear S$400,000 of debt; now second-gen owner wants to make it Singapore's top auto shop
[SINGAPORE] Once on the brink of bankruptcy, home-grown auto repair shop Pitstop Tyres is now making more than S$1 million in annual revenue – thanks to its second-generation owner's fresh approach. When Cordillia Tan joined the family business in end-2020, she brought along her experience in a venture capital firm, where she helped early-stage startups accelerate their growth. But she did not expect to spend the next few years trying to pull the company out of debt. Her father, Edmund Tan, opened Pitstop Tyres in 2009 after a career in the industry – first as a tyre fitter and then a factory manager, in companies including Singapore-listed Stamford Tyres. The business was running well until a discovery of financial misconduct forced him to clean house and hire afresh for many roles. The Covid-19 pandemic struck soon after, making it challenging for the business to regain momentum. But the elder Tan never revealed to his family how badly the business was doing. A NEWSLETTER FOR YOU Friday, 8.30 am SGSME Get updates on Singapore's SME community, along with profiles, news and tips. Sign Up Sign Up 'My father was very worried to tell the family that the banks were chasing him, and the business was struggling,' said Cordillia Tan in an interview with The Business Times. She uncovered the extent of the company's financial troubles only after she saw first-hand the outstanding bills and declining sales. The business was clocking just S$15,000 in monthly revenue, servicing only three to five vehicles daily. At the same time, it was overdue on utility bills and owed multiple suppliers money. Problem-solving To help her father's business survive, Tan applied her experience in helping startups to scale. But first, she had to get up to speed on how the automotive industry worked. 'I thought I would be in the corporate world for the rest of my life, so I did not even have a driving licence,' she admitted. She recalled an embarrassing incident where her mechanic had asked her to step on the car brake, but she did not know which pedal that was. After that, she took part-time automotive courses. 'I did all the short courses that were available, so at least I would not be an idiot; and when I open the bonnet, I know what is going on.' Her next challenge was understanding the business well enough to tackle its problems. 'My mistake was that being startup-savvy, I knew all the right strategies to bring. But I did not realise how difficult it would be to bring those things into an SME (small and medium-sized enterprise).' Sales funnels and customer relationship management systems, for example, can be easily adopted by young startups with organised processes, she noted. But if an SME has years of fragmented customer data, records and processes have to be fixed before new strategies can be implemented. 'When I came in, it was very hard for me to prioritise anything, because I was just problem-solving,' she said. Beyond overhauling internal processes, she also had to negotiate and rebuild relationships with suppliers who were unhappy due to the outstanding debts. 'I was walking up and down Chinatown to lawyers' offices to ask if we could negotiate with their clients to come up with a payment plan.' In early 2023, Pitstop Tyres expanded its services beyond tyre sales and replacements. PHOTO: KEZIA LEVIANNE KOO, BT Turning point Beyond fixing problems, the business also needed new ways of generating revenue. So in August 2021, Tan turned to TikTok to market the business. It took eight months of trial and error, and steady content, before she made a breakthrough. She found success in making educational content about car maintenance, sharing what she learnt as she went along. As views went up, so did the number of customers, boosting monthly revenue to a range of S$30,000 to S$60,000. Yet, while higher revenues helped to cover costs, this did not make a dent in the debt. In early 2023, Pitstop Tyres began to expand its services beyond tyre sales and replacements to include rim repairs as well as general car repair and maintenance. The move to diversify was also because tyre sales do not have good profit margins, said Tan. These new services now contribute half of the company's revenue, with the rest from tyre sales. Having more services also necessitated a move to a bigger shop – an investment which she felt was worth making to accommodate the additional equipment and parking space needed to scale the business. 'Even though it was a very painful decision to throw all the money saved up into the deposit for this (new) shop, I think we really just had no choice but to move here,' she said. New ambitions Pitstop Tyres has not yet turned profitable, but is on track to clear its debt in two years. Instead of a target for annual revenue, Tan has a salary target for employees, hoping to give annual increments of 10 to 20 per cent. With the debt-free goal in sight, she wants to focus on customer service, with the eventual aim of becoming Singapore's top automotive shop. 'I want to make sure that the experience at my workshop is unmatched (by others),' she said. 'So instead of trying to expand outwards, what I want to do is to make sure that everything in my shop is tight so that we do not need to chase business.' Pitstop Tyres makes in-store pricing prominent so that customers know exactly what they are paying for, she said, noting that car workshops are often seen as having shady business practices. 'I want everything to just be transparent and honest,' she said. 'This is my way of doing business.' In 2024, Edmund Tan retired from the business, leaving his daughter fully in charge. Reflecting on her entrepreneurial journey, Cordillia Tan said: '(Back when I joined), I did not have any vision for the company. I just knew that I was suffering.' 'I was very proud of the company surviving, definitely. Not dying is an achievement,' she added. 'So I'm very happy with how far we've come. And I would say I'm proud of the team I've built.'
