Landlords should expect to see an increase in demand from renters, according to the international law firm CMS.
The rental demand in inner city areas is changing and the demographic of tenants getting older, according to research carried out by the business advisory firm FTI Consulting on behalf of CMS. In a survey carried out on 6,500 people living and working in three cities in the UK, and three capital cities in mainland Europe, as well as 200 estate agents and developers. The participants were surveyed on what their preferences were when it came to their living environment.
One of the biggest take away points from the results was an increase in demand from older tenants in inner city areas and that tenants fully expect to be renting well into retirement. 61% of respondents believed that they would be still renting once they retire, 53% of those respondents fell into the over 55s category. Ciaran Carvalho, head of real estate at CMS UK, believes that this was a reflection of the current climate: ‘The acceptance by the baby boomer generation that renting is an option in later life is perhaps a reflection of the changing perception and nature of later living accommodation compared to 20 years ago.’
It also highlights the issue of tenants struggling to get on the property ladder. More than 56% of respondents weren’t intending to purchase their own property any time soon and a staggering 67% of renters surveyed were either in debt or just about breaking even every month, making it impossible for them to save up for a deposit. It has been reported that the UK home costs around eight times the average salary, and this figure rises to 13 times the average if you’re looking at property in London. This ratio has doubled since 1997.
Surprisingly, a number of renters have no desire to get on the property ladder, with 69% believing that the government should be encouraging more homes to rent rather than to buy. This begs the question of whether the majority of renters feel that renting is more suitable for their lifestyle or they’re just simply accepting the fact that they have no option but to rent long-term.
In response to the findings, Carvalho said: ‘Urbanisation, new lifestyles, different work patterns and increasing mobility are changing Europe’s cities. We have explored how affordability and supply issues, coupled with shifting technological, economic and lifestyle factors, are shaping demand for rented residential solutions across generations and societal groups.
‘Our findings indicate that we are going to see unprecedented levels of interest and investment in all forms of rented accommodation in Europe’s leading cities. This will reshape local housing markets from an economic and political standpoint, but more importantly will better reflect how people of all ages want to live, work and play in our cities in the future.’
There is no denying that the current climate is more suited towards renting, particularly in inner city regions.
Are you looking to make your next buy to let investment? Get in touch today!
