According to recent figures, the average house price in the UK is £234,742. Brexit notwithstanding, property values are now rising again. As expected, there are wide geographical variations – the North East (£130,688) is at one end of the scale, which contrasts sharply with property prices in the capital (£471,504).
Who is generation rent?
Millions of young adults in the UK now belong to what’s affectionately termed ‘generation rent’, whose expectation to buy their own home is well below that of previous generations. Whether this market segment chooses to rent their home out of necessity or preference, the impact on the demand for rental property is huge – and landlords should be aware of the implications.
The phenomenon of generation rent coincided with the coming of age of millennials who now make up the 25-43 year age group, and this is the target demographic. Bear in mind that these are digital natives, comfortable with technology and the marketing opportunities this brings. They’ve been targeted, marketed and remarketed to all their lives, which has turned them into savvy, demanding consumers.
Can’t buy or won’t buy?
When it comes to property, there are two distinct groups of renters, those who rent because they choose to, and those who rent because they cannot afford to buy.
Cannot get on the housing ladder.
A combination of high property prices, stagnant income growth and tighter lending policies have made home owning harder over the last 20 years. Most properties now require a 5-20% deposit for lenders to consider financing the purchase. As a consequence, only 23.9% of homeowners in 2018/2019 were aged between 24 and 44 years old, according to recent statistics.
Renting out of choice.
Recent research by AXA Insurance has shown that a significant proportion of millennials are happy to rent because of the freedom and flexibility offered compared to owning a home. Renting, it seems, can also be a deliberate lifestyle choice, one that rejects the burden of mortgage payments in favour of more transient lifestyle options. As such, renting a home may no longer just be a stopgap while saving up for a deposit.
How to reach this market segment?
Marketing in the property market has traditionally not been target specific to millennials or their lifestyle considerations and concerns. So, what can you do to reach this demographic with your marketing messages?
Comfort and security are key for all tenant experiences, and even more so for millennials who expect things to be working the first time, or fixed quickly. A landlord or letting agency that acts promptly and responsibly to ensure that their rental property is well maintained and regularly looked after is a big plus.
When a new tenant moves in, a comprehensive inventory or a schedule of condition will help to protect the position of both parties and provide evidence to prove the condition of the property at the time it was let. Some surveyors offer templated documents for your convenience.
Experiences vs possessions.
One thing we know about millennials is that experiences and instant gratification are arguably more important than material possessions. Despite mounting student debt, young adults are among the biggest spenders in Britain.
This is something landlords should take into consideration. Location and proximity to eateries and retail areas are highly prized among young tenants whose lifestyle revolves around socialising and shopping.
Home sweet home.
Without a sense of ownership as far as bricks and mortar are concerned, homeware becomes a defining feature of the rented home. Often, there’s no possibility to customise or even decorate the property to the tenant’s taste, making quick fix purchases an increasingly popular choice to make a house a home.
From cosy, colourful cushions and floor rugs to houseplants to second-hand furniture that can be disposed of when moving home, millennials are travelling light. Promote your rental flat by highlighting the space available, and the versatility this brings.
Honest and open communications.
Generation renters prefer direct messages without wasting time searching for detailed information. Your online marketing should start with a clear, concise headline that enables them to decide straight away whether the advertised property understands their problem, speaks to their situation and offers them the solution they’re looking for.
Focus on promoting the property’s benefits, not its features – ‘sell the sizzle, not the sausage’ – using all the tools at your disposal. Share your advert on social media, and make full use of live streaming new listings and open houses on Facebook Live, Instagram Live or YouTube Live. That way, your would-be tenants can make a decision and express their interests without having to take valuable time out of their busy day to view potential properties, while you save office resources too.