“An Insight to Generation Rent”
At the recent “PRS Forum” conference, large UK property management group LSL published a fascinating survey of opinions and preferences expressed by renters around the UK. More than 36,000 tenants were contacted. The PRS is still lacking some way behind the home-ownership market and commercial property sector when it comes to market data and transparency. There is no equivalent of Land Registry for residential renting!
The LSL survey reveals some very interesting trends in terms of attitudes towards renting by all age ranges surveyed. What is abundantly clear is the desire by residents to connect with their neighbours and with 61% indicating a desire to participate in communal activities. In the UK PRS we are a long way behind our colleagues in the US and Europe when it comes to recognising the importance of proper rented community living. In the US for example, the mantra of “sleep in your apartment but live in the building” is common thinking as is the notion that renting is genuinely a tenure of choice.
Research has also found out that if a tenant/resident connects with their neighbours and makes friends; they are far more likely to stay as a long-term resident and this represents a “win-win” for both resident and landlord. “Build to Rent” is fast becoming part of our vocabulary and the latest statistics announced by the British Property Federation (BPF) reveal that as much as £90bn of investment is being targeted at the UK’s PRS. This represents an opportunity to create purpose-built, bespoke buildings which are designed for renting from scratch. The results of our survey indicate that there will be a ready appetite for this new style of living! It also emphasizes the importance of maintaining good connectivity and communication at all times.
Increasingly, property managers will need to embrace resident friendly technology which enables repairs and maintenance issues to be proactively resolved as well as connecting residents via a portal to communal facilities and the wider community.
More than 80% of would-be tenants use an online property search portal when searching for a new property although more than 50% still use a High Street letting agent and this is reflective of a generational divide, as our survey shows.
Interestingly, also of major concern to our tenants is the role and reputation of their landlord, with this coming second place to condition of property (46% and 52% respectively) as factors of importance when choosing a property to rent. This also reiterates the opportunity for those PRS investors and Built to Rent landlords who are concerned with building a brand in the sector. As competitive tension in the market increases, reputation will become more important. The corollary to this however is the apparently less degree of emphasis being placed on the provision of additional lifestyle services behind more fundamental aspects of rental living. It seems as though “getting the basics right” is the main priority. The segmentation of importance of additional services by age does however underpin the need for essential rental market research at the outset of any new project or development.
Distance from place of work, immediate availability and length of tenancy figure highly in the initial search process – reiterating the importance of location, choice and tenure length as major factors in the minds of would-be renters. Longer lease periods, providing greater certainty are becoming more popular and are likely to become commonplace as the “Generation Rent” sector grows and becomes an integral part of our housing community.
What is abundantly clear as the appetite for creating a new, professionally developed and managed rental sector emerges, is that in the UK we still need to have a greater understanding of what our renters really want and desire from their landlord, their property and their “generation rent” community.