Rental demand from older tenants likely to increase in the future
New research from an international law firm shows that the rental sector in major cities is now changing its demographic make-up and including far more retirees than before.
FTI Consulting, on behalf of law firm CMS, has surveyed 6,500 people living and working in three British cities and three mainland European capitals as well as 200 estate agents and developers.
It found that the need for rental accommodation is now greater than ever with UK homes today costing eight times average earnings – and over 13 times in London. The ratio has doubled since 1997.
“Urbanisation, new lifestyles, different work patterns and increasing mobility are changing Europe’s cities” according to Ciaran Carvalho, CMS head of real estate.
“Our findings indicate that we are going to see unprecedented levels of interest and investment in all forms of rented accommodation in Europe’s leading cities. This will reshape local housing markets from an economic and political standpoint, but more importantly will better reflect how people of all ages want to live, work and play in our cities in the future.”
Some 56 per cent of respondents agreed that owning a property is becoming less popular with 69 per cent believing that their government should encourage more homes being available for rent rather than to buy.
Additionally 61 per cent of all respondents would consider renting when they retire, with 53 per cent of over 55s in agreement.
“The acceptance by the baby boomer generation that renting is an option in later life is perhaps a reflection of the changing perception and nature of later living accommodation compared to 20 years ago. It is now more acceptable to retire to purpose built retirement communities as the quality of the product has vastly improved. One in 200 people in the UK aged over 65 live in bespoke later living homes. In the USA and Australia it is one in 20” says Carvalho.
The poll asked the generational groups what were the motivations for moving accommodation, with the number one reason being the need for more living space (29 per cent). Only the baby boomers (14 per cent) said they would move because they need less space – an indication that the later living model would appeal to this equity and cash rich group.