Tenants aged 35 to 49 are now the largest age group renting privately, according to new research from estate agent Knight Frank.
30- and 40-somethings have overtaken millennials (25 to 34-year-olds) when it comes to the numbers renting because of the difficulty in saving for a deposit for their first home, according to a poll of 5,000 tenants conducted for Knight Frank estate agency by YouGov.
The main reason for renting is affordability, with 61% of tenants citing this as a priority. Lack of a mortgage deposit remains key driver for renting, though this ranges from 71% of young families to 41% of those aged under 25.
Location is the second priority for tenants, with almost a quarter (23%) keen to find a home in the right area. More than one in 10 tenants say renting allowed them to live in an area they could not otherwise afford, while a similar number are influenced by the size of the property.
Knight Frank’s ‘Multihousing 2019’ report, which reflects the views of 5,000 Brits renting privately, also found that, on average, 69% of tenants still expect to be renting in three years’ time, rising to 93% for baby-boomers (aged 65-plus).
Different types of renters identified by the research included 'nesters' - urban living coouple between 25 and 49, 'soloists' - single people living in cities and 'iGens' - renters under 25. The graph below shows the most common reason for not owning cited by the different groups.
Click on the image above to expand. Source: Knight Frank, February 2019
The report highlights what tenant are looking for when picking an apartment, which now focuses more on internal amenities, such as an en-suite bathroom or high-end kitchen, rather than external factors, such as distance to local shops.
Knight Frank forecasts that £75 billion will be invested in the professionally managed private rented sector by 2025.
Researchers also polled more than 25 of the largest funders and developers of purpose-built private rental property and retirement housing to get an insight into future trends.
It found that almost two in five (38%) of this group wanted to provide ‘cradle to grave” housing, from student housing to housing with extra care for older people.
The report reveals that demand for privately rented homes is set to grow, with an additional 560,000 households expected to be living in the private rented sector by 2023. This would take the proportion of those renting privately within the housing market to 22%, up from 20.6% today.
Knight Frank’s research comes in the wake of last week’s English Housing Survey, which reported that after a period of substantial increase, the proportion of households in the private rented sector has not changed for five years.
It said that in 2017-18, the private rented sector accounted for 4.5 million or 19% of households. While the sector has doubled in size since 2002, the rate has remained stable at around 19% or 20% since 2013-14.
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