Britain’s housing market is undergoing a substantial shift with renting becoming more prevalent than in the past. New research conducted for agent Knight Frank gives some clear pointers about what tenants are looking for, when searching for a home to rent. The good news is, they are looking for the facilities that new, professional landlords in the PRS are increasingly offering.
Close to one third of respondents from the 3,500 people surveyed now say that renting is a lifestyle choice. They like the flexibility, and don’t want to be tied to a mortgage. “Well over a third of under 25s said that renting suited their lifestyle,” says the report. “Nearly a quarter said they were unlikely to ever move out of privately rented accommodation.”
“The results show that the private rented sector is not considered by the majority of renters to be just a short term move. Only 24% of tenants expect to leave the sector within two years.”
The research clearly lays out the issues that new investors in the sector need to address. “In order to make the right investment decisions, finding out what tenants want and need is crucial,” said Tim Hyatt, head of lettings at Knight Frank. “This report aims to answer those questions.”
It appears the provision of good local facilities, with transport links nearby, are considered vital. More than half of respondents said that proximity to their place of work or study was important, while 78% want to live within 1km of the nearest transport link, whether a railway station or bus stop.
Parking, furniture, a gym on site and proximity to local amenities are all important considerations. The research found 50% of respondents would happily pay more for off-street parking; more than 53% of under 25s would pay extra for a fully furnished flat, though this figure dropped to 32% for those in the 25-34 age group.
Once in a home, tenants seek a landlord who can be easily contacted, responds promptly to deal with problems, and sends reliable trades people to remedy faults. They desire transparency and competitive fees.
Affordability an issue
One big issue that is largely beyond the power of individual landlords to control is that of affordability. Two thirds of respondents was this as the most important issue, with most considering a rental of 40% of gross income as being a maximum they would pay. Around one third of those surveyed said they would be happy to trade down personal space, taking a studio flat in a block with communal entertaining space, in order to improve affordability, and also potentially to secure a better location; this was a more acceptable strategy particularly in London.
Those building for the private rented sector also need to note that the research uncovered evidence of a “rental ceiling”, as those with higher earnings will not be prepared to pay a similar percentage of the income on rent. “Even if their income rises, there is still a natural limit to what tenants are prepared to pay on rent,” says the report.
More details from the Knight Frank renters research report.