In generations past, home ownership was an achievable and normal life aspiration for young adults in Britain. Twenty years ago, 60% of people living in London owned their own home but now in less than a quarter of a century, this is down to 40% and continuing to fall. This decline is due to a variety of reasons, the main being affordability. Locked out by the rising cost of home ownership, unattainable deposits and stagnating wages, our millennials, Generation X’ers and most likely all future generations are destined to become ‘Generation Rent’.
What is driving Generation Rent?
Average house prices have risen by 173% since 1997, and despite numerous government initiatives to make home ownership for first time buyers more attainable, under 35s are being priced out of the market. The private sector has doubled in size since 2004, with almost half of people between 25 – 34 renting from a private landlord.
However whilst Generation Rent may be a new cultural norm for the UK, in many European countries ownership is not necessarily considered a rite of passage, and for example over 60% people living in Switzerland rent throughout the entirety of their lives.
Where is Generation Rent spending its money?
Within this sector, there are also a growing number who are rejecting societal norms and renting out of preference rather than necessity. This is a generation of people who have grown up with advertising in all forms across multiple platforms. They have grown up with the vest and immediate choice provided by the internet and are therefore savvier and more transitory than previous generations. They also choose to spend their money on experiences rather than material goods and an average of 50% of a millennial’s disposable income is spent on leisure, from eating out to cinema trips.
So what does Generation Rent want now?
A recent study of the housing market suggested that 17% of renters prefer the flexibility and freedom of a rent payment over a mortgage, and this preference-based renting group are currently revolutionising the rental space. They are demanding high quality properties, close to transport hubs and local amenities.
As befitting of the most web friendly generation they expect prompt if not immediate service and as many are spending more than two thirds of their income on rent, as many now do, they expect a certain level of quality and comfort as standard.
How should landlords reach Generation Rent?
Through our placemaking work in places like Earls Court and Station Hill Reading, the team at Underscore can see that new developments are listening to this new group and are offering a wide variety of incentives. Tipi for example is a new apartment complex in the London suburb of Wembley Park with zero deposits and agents’ fees, as well as providing furnished apartments with John Lewis furniture and Samsung electronics. They have also combined utilities, broadband and gym membership within the rent, and, unusually for a new apartment complex, they are pet friendly. These sweeteners, alongside keyless access and a 24/7 concierge service, prove that Generation Rent are a sizeable force in the rental market, and the cost of their Rent now delivers an entire lifestyle.
When approaching branding projects of this nature, we’re factoring in the lifestyle ambitions of Generation Rent just as much as traditional homeowners as these people are certainly not transient and form the communities we seek to establish for the longer term.