I have a lodger in my six-bed London home: SpareRoom founder Rupert Hunt on the rental crisis

Rupert Hunt launched SpareRoom in 2004 

Rupert Hunt never set out to be a web developer, let alone launch one of the country’s biggest rental websites. 

Instead, he wanted to be a popstar.

After studying for a pop music degree in Leeds, Hunt moved to London with his bandmates and the grand ambition of becoming the next big thing.

But he found himself so fed up with the rental market that instead he set about developing an online noticeboard to connect people looking for flatshares.

SpareRoom took off almost instantly and has now – almost 20 years later – it has become one of the country’s most used rental websites.

He invites This is Money to visit where he used to live and to his current home, to talk about what he thinks is wrong with the UK’s rental market.

‘It was an obvious step to bring it online’

It’s very rare that work takes me to somewhere just down the road. In a part of east London that gentrification hasn’t quite hit, it’s not the usual place for an interview.

So when Hunt suggests we meet at the flat where he used to live, and where SpareRoom was born, just a short bus journey from my own flat, I jump at the chance.

We plan to meet at the spot, which is tucked away off the A12 and just before the Blackwall Tunnel. Picturesque it was not.

What was wasteland is now in the midst of being developed into luxury flats, a far cry from what Hunt had in the early-2000s. 

Past the cranes and trucks was a tiny alley way that opened into a courtyard packed with fridge rental vans, and I find Hunt, who seems as bemused as I am.

When Hunt moved to London, it was the only spot he could find with his bandmates and, for the grand sum of £250 a month, moved in above a lettings agency.

While there, his dream of becoming a musician started to dissipate and he soon found a job in the nearest Tesco. He then started to explore the world of web development.

At this point, the internet was still in its early stages and the idea of a lettings site was novel. If you were looking for a place to live, there was no central hub like SpareRoom or Rightmove to browse.

Instead it was a trip to your local newsagents to look at local listings or picking up a copy of Loot, a classified ads paper.

‘The trouble is you’d be waiting at the newsagent and by the time you rang them, the flat had gone. 

It was a very frustrating experience,’ says Hunt. 

‘The only places you’d heard of when we moved were places we couldn’t afford. It was a struggle as there were no maps. It was an obvious step to bring it online.’

Hunt started tinkering with coding in his spare time and eventually launched intolondon.com, originally a lettings and sales site where people could advertise privately and agents could also use.

It was ‘met with tumbleweed’ but the flatshare noticeboard, which was bolted on right at the end, started to take off.

Hunt then moved home to Manchester, where he realised flatsharing wasn’t just happening in London and launched SpareRoom.

Their first ‘speedflatmating’ event – like speed dating but to find prospective new roomies – was not an instant success. 

Six people, including a local journalist, showed up. From there, and thanks to local coverage, it snowballed and Hunt welcomed TV crews and radio stations to the third event.

And Hunt has even found his own flatmates through the events and website. Initially, he set out to find lodgers for ‘market research purposes’ before realising he liked living with other people. 

He has shared his home with 17 people over the last 10 years.

‘It’s old fashioned to be a profitable business’

We drive to Hunt’s current home situated on a cobbled street in Spitalfields, which he currently shares with a lodger who is living with him for the second time.

The six-bedroom Georgian townhouse feels more fitting than the flat by the Blackwall Tunnel for the founder of one of London’s most popular websites.

Hunt’s home is worth millions and is adorned with beautiful paintings and stuffed animals. The stuffed bear – inherited from his family who bought it off antique dealer David Dickinson – takes pride of place outside his living room.

But that’s the extent of his showiness – the house reflects this unassuming, softly spoken founder. There’s no TV, no microwave, no fancy speaker system, and the frugality extends to his approach to running his business too.

In the 19 years running SpareRoom, Hunt says he has not once taken investment. He says it wasn’t a conscious decision but now chalks it up as the secret of his success.

‘I think it would have been too easy to spend someone else’s money on things that didn’t work. Not having money forced me to be creative and leverage what I could to help the business.’

He maxed out a few credit cards and bought the domain name spareroom.com for $2,000, but says not a lot of capital was needed.

‘It’s so nice to be independent… you can focus on the customer and make it the best it can be without having to please investors. It’s the best thing I ever did.’

I’d imagine that the lovely house in central London was a nice bonus, too. But he seems to really believe startup culture has changed for the worse.

‘No one’s interested in building a business for the long term. I think a sustainable business that makes a profit has become a bit old-fashioned now.

‘We often call ourselves a modern family business. We create modern families because we match up flatmates… but I also feel like we have some of those old school values too.’

Businesses that call themselves a family are usually met with an eyeroll from me, as more often than not it’s a dysfunctional one. But I sense that Hunt really does try to treat it as a family business. 

He’s even got the band (partly) back together – the singer in his band is now his head of tech.

SpareRoom launched in 2004 and was the first flatsharing website online

Making ‘modern families’

Making those ‘modern families’ is proving a little harder than it seems at the moment though. 

The UK rental market is reaching near-breaking point as landlords sell up, leaving renters left scrambling to find homes.

The power dynamic between renters and landlords has shifted back and forth depending on supply, but you also can’t help but feel that the situation is the worst it’s ever been.

Hunt thinks it has hit crisis levels as prices reach record levels in London. Over the last decade, there are now the lowest amount of rooms available while the number of people looking have tripled, he says.

SpareRoom plays its own role in this too, though. 

For many tenants, their experience of renting in London is so intertwined with SpareRoom. 

It has become an essential part of renting and the horror stories that emerge on social media can often begin there.

‘It’s hard to influence when its marketplace supply and demand. All we can really do in terms of taking the heat out of that difference is to try to advertise and make sure we get more of the side that’s lacking. 

‘But it doesn’t make as much as difference as we’d like because it’s driven by the market.’

About a year ago, SpareRoom ran a campaign to try and get more people to rent out their rooms but it hugely backfired. 

Renters criticised them for taking advantage of the crisis after telling people they could make money from renting a room during the cost of living crisis.

Offer your home to a lodger and solve the rental crisis

Anyone that has a clear-cut way to solve the crisis usually has little understanding of all of the forces at play in the market.

Most have accepted that building new homes is the only way to take some heat out of the market in the long-term. It scratches Britons’ insatiable itch to buy a property, which is moving further out of reach for many as under-supply means further house price and rent rises. 

But building houses isn’t an overnight solution and can only be achieved by support from politicians.

Hunt thinks the decline in the number of live-out landlords in the past seven years has been key to the market’s dysfunction.

Their numbers have been gradually declining since 2016. Figures from estate agent Hamptons shows that by the end of 2023, private landlords will have sold almost 300,000 more homes than they have bought since 2016. 

Hunt says there are still people intending on leaving: ‘It’s probably going to get worse before it gets better.’

A spike in mortgage rates might have pushed some landlords out of the market this year, but Hunt thinks the issue goes beyond that. 

Airbnb’s move into the short-term let market, paired with changes to buy-to-let rules, have ‘incentivised landlords to rent their flats as holiday lets rather than residential.’

Hunt thinks levelling the playing field between the two would go some way in solving the issues: ‘We have a rental crisis not a hotel room crisis’.

His solution? To convince homeowners to rent lodgers in greater numbers.

He estimates there are 26million empty bedrooms in England alone: ‘If we convinced 3.5 per cent of them, that’s like a virtual city the size of Liverpool. If we convince just 2 per cent, that would redress supply and demand, and push rents down to where they should be.’

Encouraging more live-in landlords might sound like an easy, almost instant, way to alleviate pressure on the rental market. 

But in reality, just how many people are going to open their doors to someone, just to help renters?

It might make SpareRoom more popular, but I’m unsure how this would go down with both potential landlords and tenants.

As a renter who aims, perhaps naively, to own their own house at some point, the last thing I’d want to do is share a flat with someone I don’t know again. I imagine others who have spent their 20s in and out of house shares are likely to feel the same.

Similarly, I’m not sure many people who’d want to live with their landlord, even if it did mean cheaper rent.

Hunt accepts there are a lot of preconceptions, particularly around privacy and the feeling of being a guest in your own home.

But he ‘doesn’t get a sense of people down on live-in landlords in the same way as live-out.’

That might be more to do with the fact that he has lodgers himself and lives in a beautiful house in central London.

If it is marketed as a way of making some extra cash, there’s no guarantee a surge in live-in landlords would work en masse. It would need support and incentives from central government, otherwise Airbnb will continue to dominate the market.

‘There are definitely pros and cons. It’s generally cheaper but you don’t have the security. The upside is if your landlord is there, stuff gets fixed. It depends on the situation.’

It’s admirable that Hunt is looking beyond ‘build more houses’ as a solution, but beyond turning the UK into a nation of lodgers, there have to be options beyond that.

> Two in five renters live with unresolved maintenance issues  

Is SpareRoom adding to the crisis?

Beyond rising rents, the rising number of rental scams is further destabilising the market.

Looking at Rightmove and Zoopla in the hope of finding a property can feel futile in this market. It means many renters are looking to listings on SpareRoom, GumTree and Facebook in the hope of finding a room.

This can and has worked for plenty of renters but unlike lettings agencies, they don’t have the resources to manually check every property.

Last year, Action Fraud received more than 6,000 reports of online rental scams and this is likely to rise in the current market conditions.

Hunt says side moderation and customer services is one of the areas SpareRoom invests the most in, but concedes ‘we’re not a lettings agency that can go and check on everything… we’re slightly limited.’

> I lost £3,500 to a friendly grandmother renting a flat on Facebook 

It has an automated system that picks up for obvious indicators. This includes properties being cheap for the area and certain language that’s used, particularly in private messaging.

However, Hunt says that over time it has become more subtle: ‘the more sophisticated we get, the sophisticated they get.

‘If it seems too good to be true it probably is.’

That renters are now preyed on by fraudsters speaks to a dysfunction in the market beyond rising house prices and pressure on landlords. 

Building more houses has to be a priority but Hunt should be praised for offering a solution beyond that.

This post first appeared on Dailymail.co.uk