‘Generation rent’ is the latest buzzword that is circulating around the media. Similar to ‘millennials’ or ‘generation Z’ there has been much information published on these demographics affecting the property industry, all in different ways. The presence of generation rent has emerged over recent years, with its effects becoming widely known.
Generation rent is one of the most notable influences on the property industry within the UK, and the demographics presence is set to grow even more. Predictions show that by 2021, 25% of UK households will be occupied by privately renting tenants. This comes as soaring house prices and stagnant wages are making it increasingly harder to step onto the property ladder, due to houses becoming more unreachable and unaffordable.
Across the UK, there are already just shy of five million households forming the privately renting population. Three-quarters of that figure live in properties owned by private landlords. It is the young population that forms the largest proportion of private renters, particularly in major towns and cities that are attractive for young professionals due to a high standard of business opportunities. Ages 25 to 34 make up the largest demographic, which looks set to continue throughout 2019 and forthcoming years.
Another noticeable point to make is that private tenants are residing in their chosen accommodation for longer. Particularly within the buy to let industry, the market is perfect for investors as longer tenancies create a stronger income stream that allows investors to plan for the future ahead.
The growth of Generation Rent has come about as a direct consequence of changing and adapting attitudes within the property industry. Those referred to as ‘generation rent’ highly prize city centre living, particularly as the trend has become more prevalent over recent years. Young professionals and graduates prefer living in the city centre due to proximity to local transport links, busy nightlife, and convenient access to libraries and university campuses. Students and young professionals want to live close to where they work or study, wishing to reduce commute time to an absolute minimum, and often these properties come at a premium.
The type of property located in the city centre is mainly buy to let. These are often in the form of spacious apartments that are available for buy to let investors and popular with tenants. Leading property investment company RW Invest specialise in off-plan developments, designed to provide the modern-day tenant with all they need. In cities like Liverpool and Manchester, buy to let landlords have an abundance of opportunity to capitalise on each tenant, particularly with the rising student body and the fact that these cities have become so popular for people choosing to rent.
Considering the future of buy to let, prospects look positive. Currently, the build to rent sector is worth a staggering £25 million with further growth projected to hit £70 billion by 2021. Due to enormous predictions going forward, there would be no better time for buy to let investors to consider the UK property market. Just make sure you appeal to generation rent in order to fully flourish, as this demographic is set to dominate the property landscape from now on.