New Generation of Lifetime Renters – What Does it Mean?

There has been a huge rise in the number of people living in rental accommodation in the UK over the past few decades. There are various reasons for this, but what does it mean for the UK? How will a generation of lifetime renters affect the property market? 

There are a number of factors that have led to a huge rise in the number of young people living in rented property. This is not a new phenomenon, it’s always been predominantly young people who were renting before they bought their first house. However, the time it takes to save for a deposit for a first house is becoming increasingly longer. Higher rents and increased costs of living are making it harder for young people to save towards a deposit. Getting on the housing ladder seems to be getting harder and harder, so people are staying in rental accommodation for longer than ever before. 

Many young people have reconciled with the fact that they are going to be a lifetime renter. In many parts of Europe this is the norm, and well-travelled and open-minded young tenants are less averse to the idea. A recent study has shown that a third of millennials will be renting into retirement. For people who want to travel, aren’t sure about where to settle down or don’t want to be tied down by home ownership, renting remains a good option. The number of homeowners aged 20-29 has decreased from 50% in 1993 to 20% now and this trend looks set to continue. Owning a home has become less of a priority for many young people, instead they are choosing to spend their income on experiences for now, like trips abroad and high-end apartments.

Rents have also been on the rise, in some parts of the country, by staggering amounts. Though great for property investors, these rent rises have meant that people are spending more and more of their monthly income on housing. This increased spend should be leading to better rental accommodation. In some cases, it hasn't, but in others the standard of rental property available has dramatically improved. Elegant city centre apartments are providing high quality homes for a rising number of young professionals that are flocking to cities in the UK for job opportunities. Apartments in Manchester, like these by RW Invest, are proving incredibly popular with both tenants and investors alike. Modern, centrally located and beautifully designed, these apartments are ideal for the long-term renter.  

There has been growing pressure on the government from several organizations to increase legislations on the buy to let property sector. An increase in stamp duty, energy efficiency criteria and proposed rental caps have been seen to discourage some investors from the market. However, there are some measures which might be positive – increased tenancy lengths could mean that landlords have more reliable and regular income. Energy efficiency measures can also lead to a higher property value. 

As a consequence of the UK rise in renters, there has been a marked increase in the number of landlords in Britain. It’s been found that one in 30 adults in the UK is a landlord. This growing number of landlords mean that property investment opportunities are in higher demand than ever. The new generation of lifetime renters mean that the need for high quality rental accommodation is continuing to increasing.