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What do tenants want from your UK property investment?

From bedroom numbers to proximity to local work and education hubs, a new survey reveals the amenities young British tenants prioritise, giving investors an insight into what makes the strongest investment property.

Summary:

  • Young UK tenants reveal the things they want when looking for a rental home
  • 40% of 18 to 24-year-old renters in the UK state bedroom numbers as being very important
  • A quarter also believe that it’s very important to live close to work or university, highlighting the need for investors to focus on prime city centre locations

Are you targeting the type of property that will attract and retain UK tenants?

New research, published by online comparison site GoCompare, reveals the things that makes a rental property attractive to young British tenants.

When asked what they look for when finding a new rental home, 40% of 18 to 24-year-old renters believe that the number of bedrooms a property has is very important, suggesting young tenants are prioritising one and two-bedroom homes and apartments over studios.

Location is also another key priority. 48% of young renters state that living close to work or university is somewhat important, while 25% believe that this is a very important factor.

30% of 18 to 24-year-olds also want to move into an apartment that’s unfurnished.

The survey also revealed that 40% of tenants did not state whether they wanted to own a home in the future or not, underlining the changing attitudes towards ownership in the UK. Separate research published earlier in 2018 suggests that up to one-third of millennials (those born between 1980 and 1996) will now rent their entire lives.

All of these things that tenants now demand is driving the growth of the purpose-built rental sector. Buy-to-let, formerly the UK’s preferred rental sector, can no longer deliver the type of high-quality property in central locations that young renters now want.

Instead, investor interest is now shifting towards prioritising modern, city centre accommodation that young tenants will pay a premium to access.

Source: Select Property

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Most Landlords Surprisingly ‘Normal’ According To Research

Two-thirds of private landlords have what is classed as ‘normal’ jobs, renting out property to supplement their main income.

New research from online letting agent MakeUrMove found that the most common occupations for landlords are jobs in IT, teaching and accountancy. Surprisingly, just 5 per cent of buy to let investors are full time landlords who own five properties or more, which suggests that very few landlords profit from large portfolios.

Although many landlords are in the business through choice, the number of accidental landlords has risen significantly in recent years. The research found that a mere 18 per cent of landlords became landlords through intending to create a property investment business. 16 per cent of landlords let a property that they inherited and 22 per cent became landlords through a range of circumstances, such as being unable to sell a home.

The fact that more than half of landlords own just one property refutes the conception that all landlords are wealthy.

Managing director of MakeUrMove, Alexandra Morris, said: ‘These figures shed some light on what British landlords really look like. The reality is that wealthy, multi-property owning landlords are quite rare. Most landlords are ordinary people working in normal jobs who are renting out a property to try and save for their retirement or to supplement their main income. With 53 per cent of landlords owning one single property, it’s clear that most landlords are not living off a portfolio of properties. They work as electricians, taxi drivers, hairdressers or social workers – they are just normal people who want to maintain healthy, stress-free relationships with their tenants.’

She continued: ‘We’ve found that a good number of landlords fell into renting their property through unforeseen circumstances such as inheriting a property or struggling to sell their own house. Many of these landlords start on a consent to let mortgages and later become buy to let mortgage holders, having a mortgage on the property means they are forced to pass on the costs to their tenants.’

Source: Residential Landlord

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Why the tenants are choosing private rented sector

With reports that a quarter of the population will be privately renting by the end of 2021, it is clear that the UK’s Private Rented Sector (PRS) is becoming an increasingly popular alternative to property ownership.

New data from insurers Direct Line for Business only goes to strengthen this argument, with a recent study revealing that 70% of UK renters have no intention of buying a home. The research supported the idea that the UK is moving toward a German Housing Model, where the majority of the population opt to rent, supported by government policy and encouraging attitudes toward long term renting.

In fact, further research shows that more people rent in Britain than almost anywhere else in Europe, with only Denmark, Austria and Germany having a lower percentage of home owners.

The reasons for this are varied but often come down to financial cost. With the average first-time buyer looking at prices double what they were just five years ago, it is understandable that home ownership is slipping through the fingers of younger generations, but interestingly that is not the only reason cited by responders for wanting to stay in the PRS.

The Direct Line for Business study shows that of the 12 million adults who said they don’t intent to buy property 22% said that the financial commitment of buying was a turn off, 9% said that they chose to rent so they could freely travel and 12% didn’t want to be tied to one place. An additional 22% commented that they didn’t want the hassle and cost of maintaining a property and would instead prefer a landlord to hold responsilbity for repairs.

Business manager at Direct Line for Business, Christina Dimitrov, said: “The UK housing market continues to change and we are seeing a major attitudinal shift when it comes to renting. While price is a factor, many people are increasingly comfortable with the flexibility afforded by renting a property rather than jumping into home ownership.”

The transition toward a new model of long-term renting is positive news for the future of the buy-to-let sector, with landlords able to support a growing pool of tenants and renters able to have greater choice in the market.

Source: Property Forum

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ARLA issues stark warning – “Renters are in for a rough ride in 2018”

ARLA Propertymark has issued a downbeat report on the lettings sector’s start to 2018.

Its report on the market’s performance in January says the number of properties letting agents managed fell by eight per cent with 184 per branch compared to 200 in December.

Meanwhile the gap between supply and demand widened in January with more prospective renters coming onto the market; on average, letting agents registered 70 prospective tenants per branch in January, compared to just 59 in December.

The association says landlords kicked off 2018 with contract negotiations as one in five tenants experienced rent hikes in January, compared to 16 per cent in December.

It says that while this paints a bleak picture for renters looking into 2018, it’s actually down year on year. In January 2017, 23 per cent on tenants had their rents increased, and 30 per cent were subject to rent rises in January 2016.

“Renters are in for a rough ride in 2018. Housing stock is falling as rising taxes continue to force established landlords out of the market and deter entry into the sector – and the volume of renters is increasing as the cost of buying a home is moving further out of reach for many” explains David Cox, ARLA Propertymark chief executive.

“The fact that one in five tenants are experiencing rent increases is just another blow. Ultimately, until the prospect of investing in the buy-to-let market is more attractive for prospective landlords, and stock subsequently increases, tenants will continue to feel the burn” he adds.

Source: Letting Agent Today