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Why Landlords Should Consider Renting to Families
May 15, 2018Article by Paul Avery
It is no secret that the number of people living in private rented accommodation has been rising steeply in the UK during this century. The number of renters has doubled since 2004, while home ownership has fallen to its lowest level since 1985 (English Housing Survey).
But with all the attention focused on millennials who have been priced out of home ownership, it is easy to overlook the fact that young families and ‘nesting’ couples are an even faster-growing segment of the private rented sector.
The English Housing Survey 2016/17 finds that the proportion of 25-34-year-olds renting privately has doubled from one quarter to almost half since 2006/7, while the proportion among 35-44-year-olds has nearly trebled from 11% to 29% over the same period. Although there are far more young people renting, the age group likeliest to have children is taking up renting at the quickest pace.
More specific data from the Survey bears out this trend: 38% of private renters now have dependent children, up from 29% a decade ago. That is a net increase of 945,000 households with children who now rent rather than buy.
The main causes of this are the declining affordability of home ownership and a growing willingness among young and middle-aged people to remain mobile in order to access the most liveable areas and the best jobs. A YouGov survey commissioned by Knight Frank in 2017 found that 30% of renters did so in order to save for a deposit, 21% did so to live in an area where they could not afford to buy, 18% said renting was cheaper than a mortgage, and 6% need the flexibility because of work.
Whether this shift is driven primarily by push or pull factors, it is unlikely to be reversed any time soon by a significant increase in the supply of owner-occupier housing. So the private rented sector must adapt its offering – and the payoff is quite obvious and mutually beneficial.
Families are demanding more provision of high-quality rental accommodation that is well-maintained and safe, close to good schools and amenities, and located in areas where ownership is often out of reach. They are often willing to pay a premium for the perfect property.
In return for supplying accommodation tailored to the needs of families, landlords can secure rental agreements that are likely to be renewed over longer time periods by tenants with higher, stable incomes, and who also display a greater degree of care for their surroundings.
This group of renters is not only likelier to include better tenants, it is also expanding substantially and offers an appealing niche for landlords with properties in the right areas.