We are fast becoming a nation of renters. New figures show that almost half of all babies born today are starting their lives in rented accommodation. In 1995-96, 65% of middle-income 25 to 34-year-olds owned a home. Now, just 27% do.
The number of people renting in their 40s has doubled over the past decade. ‘Generation Rent’ is becoming a lifetime status. If we are to service this growing group of long-term tenants and benefit from the commercial opportunities they present, the property industry needs to ensure it’s keeping step with its customer base.
Much has been said about the current state of the housing market and the socio-economic forces which are driving up the number of people renting. Yet, despite the seismic shifts in the realities of how people are living, change has been slow when it comes to how they are renting.
Although technology disruptors such as Zoopla and Rightmove have dramatically changed how we source properties, the rest of the process has been slow to keep step. Rigid tenancies, hefty deposits, bureaucratic 50-page contracts, and legal technicalities which require the tenant to mow the lawn at midnight every other Tuesday but don’t allow them to use blu-tac. You get the idea. In an ever-automated world, the process of renting a property is an outlier, fraught with paperwork and weighed down by legal and local government hoops to jump through.
Today’s average renter is a smartphone-enabled, social media savvy consumer who hasn’t used a landline since secondary school.”
Operating in the rental market isn’t easy – you can’t let properties without proper processes, and risks must be mitigated wherever possible. Many agents have taken steps to modernise their processes. But the pace has been too slow. Whilst the rental market has retained these vestiges of years gone by, renters have transformed.
Today’s average renter is a smartphone-enabled, social media savvy consumer who hasn’t used a landline since secondary school. Many know home ownership is a pipe-dream, so their priorities have shifted. Travel, fulfilling work, and unique experiences have trumped aspirations for a car, kids and a garden shed. Property market players evolving their models to suit the changing needs and realities of the new generation of ‘perma-renters’ stand to gain from it.
From flexible tenancy agreements to a more relaxed attitude to pets (see the success of BorrowMyDoggy.com as evidence of our desire to keep furry friends in our lives one way or another), there are myriad ways in which the rental market can evolve in line with the habits of its users. Established market players that invest in making the process of finding, securing and managing the rental of a property as user-friendly as Netflix or Airbnb are those who will curry favour with tenants in the long-term.
Some agents have responded well to these shifting expectations, some even spotting an opportunity…”
Some agents have responded well to these shifting expectations, some even spotting an opportunity to take their offering one step further. By broadening their services, including all-inclusive bills packages or tenant focused insurance, they’ve kept up with the needs of the on-demand generation who are looking for more whilst simultaneously diversifying their business models.
The demographic of renters is changing and the time has come to increase the pace of change in the sector that serves them. We must invest in technology to make this happen, certainly, but we must also move the culture of renting forward. There is much to be gained in this market for those bold enough to evolve alongside the demographic of their customers. A tech-first approach that makes renting easy, safe, and – dare we whisper it – an enjoyable process, stands to transform the experience for thousands of people every year.