Attitudes towards renting have changed and ‘generation rent’ are looking for more freedom.
An increasing amount of individuals are looking to rent; not just because, as in past years, they can not afford to buy, but because this is an option which is better suited to those individuals.
Those choosing to rent are looking for a more flexible lifestyle, achieved by not getting tied down by a mortgage. Providing the ability to seek out change, travel and move for professional reasons; there are many who relish the renting lifestyle; it is predicted that 59% of 20 - 39-year-olds will be renting privately by 2025. There is also a tendency shown toward shorter term rentals with ‘two-thirds of renters planning to relocate within the next five years’ and 2/3 claiming they are happier with tenancies of up to a year.
Only 44% claim that they rent because they could not afford to buy, compared to a previous 67%, only 3 years ago. A paradigm shift has taken place and this generation is looking for something different from their property search.
While some are still keen to get onto the property ladder, house prices are still rising, making it increasingly difficult to do so. Despite reports that growth of house prices is slowing, down from a previous 8%, to 6.9% this month, they are expected to continue to rise in the coming year (2017) by as much as 2%. This is better, but not getting cheaper and indicates continuing pressure on the rental market to provide for the increasing population of potential renters, and will also enter the UK into its 7th consecutive year of rising house prices.
Althoughthere's much focus and discussion around ‘generation rent’, those born in the 1980’s, it is not only this generation who are favouring and looking to rent. Over 1/3 of renters are families and nearly half are over 35. There are growing families looking for a larger housing option, those who have separated or divorced moving into the rental market and retired individuals who want to downsize. The amount of under 44’s owning their own home has dropped by 17% over the last 10 years.
Build to let is the next big development in the property sector, with the aim of providing that much-needed housing. For a generation with differing ideals than that of their parents, the prospect of affordable, flexible, sociable and convenient housing is an appealing one. This is also an exciting development for both investors and property developers.
The rental market is in high demand and buy-to-let and build-to-let are both developing to provide for this growing market.