Tag Archives: knight frank

Research reveals renters desires for best PRS homes

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.

New online portal to shake up lettings and home sales markets

A group of estate agents is launching a new online letting and sales portal, to challenge market leaders Rightmove and Zoopla.

OnTheMarket is due to launch in January 2015, and is backed by some of the country’s largest estate agents. Members of the group formed to deliver it, called Agents Mutual, were driven to act by the rising charges that existing websites are charging them for listings.

“OnTheMarket has the appeal to attract the full spectrum of consumers and it has the gravitas to distinguish our brand as the natural home of locally visible, full service independent estate and lettings agencies,” said Agents Mutual chief executive Ian Springett.

The group already has more than 2,900 lettings and estate agencies committed to join, with another 100 joining every week. When agents sign up, they commit to advertising all their properties for 5 years and to list them on only one other competing portal – a commitment that threatens to break the duopoly in the market that Rightmove and Zoopla appear to have. Among the big brands that are reported to be on board with the new venture include Savills, Knight Frank and a number of regional estate agency chains.

With consumers increasingly using tablets and smartphones to access the internet, it will be interesting to see how the new portal differs from its legacy competitors.

London developers building wrong size flats

Developers in London are building flats that are too large for the rental market. By concentrating on what they think owner occupiers want, too many are building flats with several bedrooms – but the private rented sector is demanding smaller units.

London renters want studios, one bedroom and possibly two bedroom flats at around 650 square feet floor area, according to agents Knight Frank. But many apartments being built today are too large, with 650 square feet being splashed out on a single bed flat, with two beds often spread over around 1,000 square feet. And as a result, prices are simply too high for working young Londoners. Many cannot practically afford to pay more than £300 a week for somewhere to live in the capital.

“Renters are really stretched at the moment, and they cannot afford to pay more,” said James Mannix, head of residential at Knight Frank, speaking at the agent’s annual London market presentation and reported in the London Times. “Planning policy encourages larger, family units in the centre of town, but I am not sure that is entirely appropriate.”

There are currently estimated to be around 25,000 flats being built in central London. Many of them are being built to appeal to overseas buyers, who are less concerned about the practicalities of letting out their purchases, and more interested in buying for long term investment. And these buyers, if they want to rent their large roomed flats, are going to find few takers. Renters have an upper limit on what they spend, even though they would like to be in the centre of the capital. The Times reported comments from Mannix: “Many young, economically active people…… would prefer a small studio flat in the centre of town, than a one bedroom further out.”

Knight Frank says the private rented market presents great potential for companies prepared to take the first steps into such a fragmented market.