“Generation Rent” is becoming a deliberate lifestyle choice, not just a second-rate alternative to buying.
Research by Direct Line Insurance suggests that 70% of the 12 million UK renters have no plans to purchase their own place. Certainly, raising the required 5%-10% deposit can be a huge stumbling block, but it appears that millennials, at least, have largely come to terms with this. Most are now firmly committed to renting, which is good news for landlords. Not only does it keep the supply of tenants, and therefore rents, high, but it also heralds the dawn of a “better” tenant – one who regards your property as his or her home.
This is a long-term commitment, and the tenant has no plans to move on. They have every intention of looking after the property as if it were their own – even going so far as to undertake redecoration and minor improvements as well as caring for the garden. As a consequence, tenancies are getting longer, providing greater security of tenure for tenants, and a more reliable investment yield for landlords. Win-win!
The government’s proposal to consider minimum three-year tenancy agreements is therefore well-timed and very much in keeping with changing tenant preferences.
In line with the rise to age 36 for the average first time buyer, so tenants are just as likely to be in their thirties and forties, or be graduates or professionals. This may account for the fact that we have recently seen an increase in the number of property investors preferring to purchase better located, better quality buy-to-let properties.
If you’d like any advice as to how best to appeal to “a better class of tenant” (no snobbery intended) please feel free to contact us on 01242 257333 or 01452 597994.