Tenant Preferences Changing Following the Worst of the Pandemic
As the UK emerges from the worst of the pandemic and strict lockdown rules, letting agents are witnessing a change in the major preferences among tenants.
Prior to the pandemic which began in the UK in March 2020, demand for rental properties that were as close as possible to work and office hubs in city centres and popular work locations was high. Since lockdown and higher rates of working from home, many tenants are increasingly likely to prefer rental homes that can provide working and living space in the suburbs.
However, while the UK's letting sector remains strong across much of the UK, there has also been an increase in tenants moving back in with their parents and not just among the younger cohort of 18-24-year-olds; tenants aged up to 40 are also swapping tenant life for their childhood bedrooms in order to save cash as the effects of the pandemic linger.
UK Tenant Preferences Shift
The global coronavirus pandemic has touched most aspects of people’s lives and the UK’s lettings sector has not escaped. Recent research shows that following a prolonged period of working from home and generally spending more time in our homes, many renters’ priorities have changed. While demand for a short journey to work is still popular for some, it is being surpassed by an increased appetite for properties that have flexibility and more space to allow for more time at home, be that for work or personal reasons or a combination of the two.
According to Market Consultancy TwentiCi, a key detail in the lettings sector that emerged in the first quarter of 2021 is rising demand for rental properties in commuter towns – traditionally more popular with home-buyers - that offer space. Previously, tenant demand was more focussed on city locations as close as possible to offices and entertainment areas.
Meanwhile, Thirlmere Deacon Property Investment agrees with that view and identifies a number of commuter towns with good transport links as good investment options. Whilst home working will likely be a large part of many roles moving forward, for at least part of the week, the reality is there will be some requirement to be in the office, meaning good transport connections remain important.
“Renters leaving London are largely not looking to move too far, shrewd investors are turning their attentions to commuter towns for their next investment for higher growth potential and rental yields,” the firm said in a recent blog post.
More Tenants Move Back ‘Home’
While changing tenant preferences are affecting the UK’s lettings industry, another development has also hit; rising debt levels and leaving rental accommodation to move back in with mum and dad. According to flatshare specialists SpareRoom, more tenants of ages up to 40 have had to borrow money to pay their rent. But that’s not all, this increased debt burden has encouraged a growing number of tenants to leave their rental homes and move in with their parents.
Research by the business shows that a little under one-in-five 18-40-year-olds borrowed over £3,000 – with amounts of up to £30,000 disclosed – to pay for bills, food and rent during the pandemic amid a loss or reduction of income. Indeed, some 43% of people aged 18-24 have been hit by jobs losses, pay cuts or furlough schemes, with 30% of 25-40-year-olds experiencing the same.
For some tenants who have taken on extra debt but on less income, the stress has become too much and they’ve taken the decision to move out of their rental accommodation and move in with mum and dad to save money and reduce that build-up of stress.
“The ‘bank of mum and dad’ has been the biggest lender over the past 12 months,” SpareRoom said in its recent report. “Some parents showed support by opening the ‘hotel of mum and dad’, with 16% of 18-40-year-olds moving back in with their family to save money during the pandemic.”
With all of these details becoming clearer as the effects of the pandemic remain, it’s safe to say the UK’s lettings sector will not return to its pre-pandemic status anytime soon – if ever. However, change can be difficult at first but can result in positive developments for many. Let’s hope that’s the case with the emerging trends identified here.