The growth of PRS in London has altered tenant demographics. Who's moving in? and why?
Times when the PRS tenants were picking rental merely as a way to wait until they’re ready to take a mortgage are long gone. The renting lifestyle has become a conscious choice for many – and these people have specific wants and needs. If your property fulfils them, you might get yourself a fantastic, well-paid tenant for many years, not just for your usual 12 months.
Demand for the private rented sector: The proportion of households in the PRS sector is said to rise to 22% by 2023. Previously, young professionals (25 – 34) made up the largest proportion of renters, this has now been taken over (though marginally) by 35-49 years old. This age group is expected to show the biggest growth in this sector over the upcoming years as obtaining a mortgage is becoming harder and harder. Home buying still remains a hurdle for many individuals.
This correlates with the rise in the professional-managed PRS units. Currently, there are around 30,000 units already completed with a supply pipeline of around 110,092 under construction or in planning. With buy-to-let landlords leaving the market and fewer mortgages being taken out, this is necessary to meet the increasing demand for rental apartments.
Different kinds of renters:
The key to closing more deals is to better understand who you’re selling to. “When you work in agencies, you see every day how important the agents are, that people still want to deal with people and that it’s people who make things happen,” says Jaimie Beers, Managing Director of Madley Property Services in London.
More and more individuals living in the UK are living in a rental property and this is expected to continue increasing for the next 3 years. It is important to understand what kind of tenants you’re working with to better understand how to cater to their needs.
According to a survey, the biggest proportion of tenants in the private rental sector at the moment are aged between 35 – 49. With homeownership becoming more and more difficult this age group is likely to grow. This age group is closely followed by young professionals aged between 25 – 34.
The survey has found these different tenant groups in these age groups:
In London, Sharers makeup 27% of the rental market, followed closely by the nesters at 23%. With over 55% of the applicants surveyed stating that they are renting because they do not have the deposit for a mortgage.
So what are these renters looking for and how can you target them?
Homes that are within 5 miles of their current residence
Homes that are within a 30-40 minute commute from work
Targeting these tenants requires the following:
Finding properties that match their requirements (location and price-wise)
Internal amenities are very important for this age group
Being close to transport links is also important
Key Driver for Remaining in Rented Property
Lack of mortgage deposits
Affordability is the biggest deciding factor
A survey was conducted and tenants were asked what was ONE of the most important factors when choosing a property.
61% stated that the rent is within their budget
This is why it’s important to understand your applicant’s affordability range and ensure that you don’t show them properties that are over their budget.
Next, is finding properties that fit the applicant’s requirements within that budget – XChange has a solution for that.
23% stated that the location of the property was the most important
Living close to transport links and work is also important for individual renters.
10% stated the size of the property was the most important.
Other factors when choosing a location to live in?
So how can you use this:
One of the best ways to build a strong relationship with your applicants is to simply listen to them, by listening to them you’ll understand how they work and be better suited to find them a property that they will close on. Remember, it’s all about building a strong relationship with the applicant. Keeping this in mind, XChange has a solution to help you make this process more efficient.
At XChange our tech solution recommends properties for your applicants that match their requirements.
Our applicant matching solution works to find you more properties for applicants that are sitting in your CRM, or vice versa. By inputting your applicant’s requirements we can match them to properties listed on XChange. We’ve created a centralised platform where you can do all of this in one go.
We partner with Independent Agents and growing agencies because we believe that compared to the bigger corporations, you have the ability to close deals faster and provide the leads with better customer service than premium corporate agencies can provide.
Want to get started and see if your Agency qualifies, contact us through the form below and we’ll give you a call.