-As house prices continue to rise, the age of the first time buyer increases and lenders are more choosy, more people are opting to rent for longer before buying a home or indeed forever if they cannot get a first step on the rung of the home ownership ladder. This has seen a distinct shift in the approach to rented accommodation.
The New Tenant
Once seen as the realm of the young or low income population, private renting has now become the accepted norm for many singles, couples and families. As at 2018 / 2019 almost 20% of households (or 4.6 million households) per registered as private rented accommodation. The social rented sector accounts for a further 17% of all households, meaning that in combination 37% of all households are now occupied by tenants rather than owner occupiers.
This shift from home ownership to private renting has been a trend that has emerged throughout the last decade and which has plateaued at the 20% of households level rising from 10% in 2002.
Interestingly, the age factor of rented accommodation has seen a shift with 25 – 34 year olds making up 41% of private tenants as at 2019, a reduction of 7% from 2014, while the proportion of renters in the 55 – 64 year old age bracket has increased to account for 10% of private tenants.
The Rise of Tenant Focused Products & Services
The proportion of tenants to owner occupiers has stayed broadly the same since 2014. Developers and businesses started to identify the significance of the rental market at this time and a number of rental focused businesses and approaches such as PRS (private rental sector) development, co-living and landlord services have grown significantly during the past five years.
Property developers have begun to create schemes that cater to the increasing need for shared spaces, maintenance solutions and the sort of features that homeowners would typically invest to add to their properties such as smart technology and maintenance solutions.
The Changing Landlord
The private landlord has inevitably enjoyed benefits from the rising demand for rented accommodation. However, the increase has seen a rise in corporate landlords and PRS development where companies develop rental stock to retain and operate or to sell to corporate landlords. This has created a lot of competition in the market place and also a gap in the types of product offered by private and corporate landlords. Interestingly, management services and managed complexes are very much the territory of the corporate landlord and push up rents across the board.
Lifestyle is King
A rented accommodation used just to be bricks and mortar, a place to rest your head at night. Now tenants are looking for facilities to enhance their lifestyle from on-site gyms, bike parking, common rooms, concierges and home automation apps. With the rise in loneliness, community is also a key part of the proposition and schemes or properties that offer the chance to join a like minded community are popular.