In 13 years time homes headed by a person over 45 will account for at least 50% of the rental
market. A recent report by the Social Market Foundation (SMF) found that this figure now stands at 35%. This means that by 2035 – 2.7m households will fall into this category (45+).
The SMF modelled their projections on housing marketing trends between 2009 and 2019 snf they surveyed 1300 tenants. 61% of the tenants surveyed said they expect to be renting long term.
Overall, it forecasts that:
- 61% of tenants aged between 35 and 54 expect to still be in rental accommodation by 2035.
- The proportion of total households renting will increase from 20% to 22% by 2035 and home ownership will reduce from 63% to 61%.
- Households where the head is 34 or under will fall from 39% to 35%.
- The biggest decline will be in the 35 – 44 age group falling from 25% to 15% in 2035.
What does this show for the UK rental sector?
- The projected growth in the number of people opting to rent has and will continue to increase.
- Therefore, buying an investment property is still worthwhile (subject to the return you can achieve).
- If you are looking to buy now, not only should you be considering the EPC, you also need to think about who will be renting the property in the future. Access to shops, transport links and doctors will all play a part.
- If you are looking at apartments, make sure that it has a lift or you are looking at a ground floor.
For those of us that already have properties what do we need consider?
People renting now will continue to do so and therefore we will have an aging population who will be living in rental accommodation. It will not be the preserve of the young who find it difficult to get a deposit together to buy a house. With this in mind it’s for us to decide now how and if we need to adapt our properties for our tenants’ needs.
I can think of three things that we hear on a regular basis (which is mirrored by the SMF findings)
“We want a secure and longer tenancy.”
“We want to be able to decorate in my colour palette.”
“I want to have a pet with me.”
Security of tenure
There is a lot of talk that this will come along with the long-awaited Renters’ Reform Bill. The potential abolishment of Section 21 will certainly give more security, however, the proposed changes to Section 8 notices will still give the landlord the option to possession of the property. This will possibly take longer to remove a tenant if the tenancy does not run smoothly.
However, none of this will work unless there is a specific housing court that will only deal with
property matters. Anecdotally the backlog is caused by housing issues being lumped in with
everything else the court has to deal with. Let’s be honest, all I want as a landlord is a long tenancy.
However, I also want the security of knowing that I can gain possession if things go wrong, or I might need to sell the property. What is obvious is that with a growing population wanting to rent, the government needs to make sure that it is a viable option for a landlord to provide a property.
There are lots of options to protect the fabric of the interior of the property against someone who wants to paint a wall black – yes, we have had one! A clear agreement of what can and can’t be done and what needs to be done at the end of the tenancy is the way to make sure that everyone is clear about requirements. This is to help prevent misunderstandings at the end of the tenancy. It is also advisable to use good paint. Many of our decorating contractors use Crown paints.
Pets in rental properties
Thankfully we have found the attitude of landlords has changed since we started the business 16 years ago. Of the properties we have marketed recently, over 67% are noted that they would
consider having an appropriate pet (however it would not be the first option). 10 years ago this was around the 23% mark!
We have also found that most tenants with a pet are considerate individuals who sadly are put in the same box of the few irresponsible ones out there. The one way to make sure that you are dealing with a considerate, responsible pet owner is to reference the pet in question. We ask for things like a vet reference, microchip records and pictures of the pet. All things that a considerate responsible pet owner would have at the drop of a hat.
What all of this tells us that the people who choose to rent in the future will be looking for different things from today. One thing that is very clear from this survey is that the average tenant will be older and therefore we need to think about that in order to future proof our business.