The Office for National Statistics (ONS) estimated there were 4.5 million renters in 2017 (served by 2.7 million landlords) which was an increase from 2.8 in 2007. The analysis is also predicting this will increase to 50.7% of the housing market by 2039. This is against a background of government negativity to the private rental sector (PRS) (95% backed mortgage schemes). It still looks like more people are choosing to rent rather than buy.
What seems to be changing is the expectations and lifestyles of renters. The biggest group of renters are Millennials (those born between 1981 and 1996) and Generation Z (approximately born between 1997 and 2012/15). This group of people is renting for longer but not always staying in one place.
The main aim is flexibility, and the ability to live in a better home than they can afford to buy. With the average house price seeing an increase of 8.6%, the saved deposits even at 5% are not enough to buy that first home at £250,000 however renting gives them the opportunity to live in one. Recent research conducted by Hamptons showed that it is now £71 per month cheaper to rent than buy on average across the UK for the first time since 2014 – The calculation was based on a single person working 37.5 hours a week and mortgage repayments being 35% of their income.
If we look at the groups above, we have to also remember what their expectations are.
They are technically savvy and with more and more jobs involving flexible working, as long as they have access to power and WIFI they can work from anywhere. So if you want to attract this growing group of individuals, the way the property is marketed is even more important than before. No more one picture telling your audience it is a one-bedroom house. You now need floorplans, information about the location, detailed photos, and (what we have found) the need for virtual viewings. These are 101’s for attracting the biggest market.
They are looking for an ‘enhanced tenancy experience’ which includes the online experience and concierge services for example post tenancy cleans or good insurance options.
What conclusion can we draw from this?
Don’t get left behind! The market has changed and expectations are high. If you would like to find out how to maximise your rental return in the face of a changing lettings landscape, just give me a call on 01480 494939.
Get in touch if you have any queries you would like to discuss.