New research has suggested that 60% of Londoners will be renting by 2025 and that the value of the UK Private Rented Sector (PRS) will pass the £50 billion mark by 2020. Despite unfavourable policies hitting the buy-to-let sector in the past year alone, these projections show that high demand will need to be catered to. Like any business, understanding your target market is a fundamental way to build your portfolio and drive higher rental yields. But what do today’s young Londoners really want? We’ve rounded up five key market drivers that provide an overview of how to develop your buy-to-let advertising strategy.
4 bedrooms, 3 bathrooms
‘Nicer’ property options
One of the most effective ways to accumulate wealth is to invest a sizable chunk in your asset(s) from day one. According to Business Insider, the average millionaire will tend to invest around 20% of their household income each year, as part of the save-then-invest routine. This way of doing business should ring true, not only in the stocks and shares market but for landlords in the London PRS sector as well. The biggest reason why renters take the decision to move elsewhere is to find a larger or nicer property, even if it happens to be just down the road. This factor outranks other popular motives, like finding a home to accommodate an expanding family, to live closer to transport links and even to find a more affordable property.
From experience, we know that many Londoners, renters and homeowners, tend to stick to a region or particular borough, for example within West London or strictly Bayswater or Notting Hill. Despite London’s impeccable transport network, people get settled, familiarise themselves with a local area and decide to look near where they know.
The majority of tenants move within 5 miles of their previous accommodation, with a smaller fraction travelling further afield in search of work. The sheer volume of employment opportunities in London means that long-distance relocations are limited, even if tenants do live at multiple rented properties throughout their lives or before they decide to purchase. This tenant trend should make you shift your attention to nearby advertisers and regional promotions, rather than stretch your budget across the length and breadth of the capital. An additional bonus of promoting your property within a specific set of postcodes is that you’ll be advised by local experts with a great deal of knowledge about property trends in the area throughout the year.
3 bedrooms, 3 bathrooms
Some rental properties lay dormant for months, not because they’re in the wrong area, but because they simply do not have those key amenities that people are prepared to pay a premium rate for. Competition in the prime London sector has raised expectations so keeping up with fellow landlords in the same area is crucial. Nearly 50% of 18 to 24 year-olds would spend more in rent if they have access to a gym inside the building or nearby, so a complementary gym membership could pay off over the long term. Communal gardens and terraces are also popular features amongst every demographic, but if this is simply not possible, 24-hour security, extra storage facilities and even communal cinema rooms are other high-ticket amenities that are worth exploring.
All in, fuss-free agreements
Following decades of rapid growth, the term ‘generation rent’ now encompasses every major age demographic living in the UK – which we touch upon in the point below. Having said that, young people aged 18 to 24 still make up the largest proportion of market share, and what they generally want, according to research is fuss-free, all-in bills, from standard utilities to Wi-Fi and satellite TV payment options, particularly if the rent attached to a property is deemed pricey within its area. Similarly, tenants prefer a one-year flexible tenure with a break clause so if they want to move on, they can do so easily.
4 bedrooms, 5 bathrooms
Renting is no longer a lifestyle choice amongst youngsters in the city. The number of over 45s living in the sector has more than doubled to over 3 million during the last decade, and with limited provision of suitable residential housing a prominent issue today and in the future, older people living in the PRS is set to become an upward trend. With more disposable income to spend on life with a few luxuries, this generational shift has created more opportunities for landlords who have the time and extra cash to provide a comforting, secure and safe environment for elders living in London.
Rent your property through Astons London to minimise void periods, whatever the economic and property climate. Astons London specialise in the areas of Notting Hill, Bayswater, Paddington, The Hyde Park Estate, Warwick Avenue, Queensway and Little Venice. Get in touch with us today to boost your long-term rental income.