After a year of lowest ebbs for landlords and tenants yet an increase in investment confidence by over 50% this quarter, it’s fair to say that this has been one of the most turbulent periods for the rental sector. The State of Lettings Report 2021 not only sheds the light on how we will move forwards but help us identify where the opportunities are?
What is The State of Lettings report?
For anyone who doesn’t know, the State of Lettings Report is a document, compiled by Reapit (Estate Agency Business Platform provider), breaking down the latest data on tenants, landlords and the rental market in the UK. Its statistics and insights are taken from landlords and tenants themselves. We’ve pulled out some key findings we think might be helpful to you …
A growing, more demanding market
Not only are more people renting, but more are renting long-term. For some this is because of barriers to homeownership but for others, such as the next generations of renters (millennials and generation Z) this is a lifestyle choice. According to the Office of National Statistics, 20% of the UK population are currently renters, but it is estimated that in just 20 years renters could outnumber homeowners. As such, tenants are viewing their rented homes as permanent homes and lockdown has prioritised a need for outdoor areas and more versatile living space. Today’s tenant, reasonably, wants communications with landlords or agencies that are instant and actions that are immediate.
What does today’s average tenant look like?
Demographically, tenants were spread out over most categories. The highest proportion of tenants were in the 25-34 age bracket, employed full-time. When it came to marital status they were fairly evenly split between single (35%), married (25%) and co-habiting (15%). Earnings data found that 35% had salaries of £12,500 – £29,999 while 25% earned £12,500 and under. Renters were evenly distributed throughout the UK with predictable clusters in London and the South where it is more expensive to buy.
What about today’s landlord?
Well, this is where things get a little more interesting. There was a curved trend in the ages of landlords, with fewer at the younger end of the scale (but some in the 18-25 bracket and some students) and the most in the middle peaking at 45-54 and declining again by 65+. Although there were more landlords than tenants in the higher earning brackets, they also clustered at the £12,500 – £29,999 income bracket and were working full-time. The majority of landlords have just one rental property. So, is the old narrative of landlords as high-earning and high-investing individuals being surpassed by a more modern tale of your average socio-economic homeowners becoming landlords through circumstance?
And what about your relationship with us?
Most landlords found their management agency through the three Rs: research, reputation and recommendation. We are pleased to say that this is largely the case for us, with most clients approaching us rather than the other way round. Established in 1988, we’ve built our organisation (which now has multiple locations and numerous divisions, overseen by our board of directors) on reputation. Landlords that don’t use a management agency stated cost-savings and a lack of control as the reasons why. We understand that these can feel like barriers to agency management for many landlords but actually our clients benefit from less risk and more cost-savings by taking advantage of our initiatives such as no-tenant-no-fee and guaranteed income schemes (where we cover legal and void periods). We also have dedicated property managers for each client so that they deal with the same person every time, helping them retain control over their property but without the hassle of maintenance, repairs and marketing.
Millennials and Generation Z will be the first digitally native generations to enter the market. This will not only affect how they expect to communicate with landlords and agencies, but it’s also likely to have a significant impact on the market itself. Lockdown was the final push the UK needed to transition to remote working which means that future generations are less likely to need to live where they work. This opens up a world of possibilities for both tenants and landlords and it’s a brave new world we’re looking forward to being part of.