Over the past 10 years there has been a 10% fall in young people owning property in the UK, raising the importance of the rental sector.
The Office of National Statistics published new data highlighting the shift away from traditional homeownership to rental properties, especially among young people in the UK. In 2008, 37% of people between the age of 22 and 29 were homeowners. By 2017, that figure had dropped to 27%. The statistics are based on people in employment in that age range, which comes to 5.6 million people.
Recent research from the Institute for Fiscal Studies showed: “The falls in homeownership have been sharpest for young adults with middle incomes… The key reason for the decline is the sharp rise in house prices relative to incomes.”
Changing generational attitudes are also viewed as another main reason for the decrease in homeowning among young adults. Because of this 10% drop in homeownership, there has been a rise in rental demand for quality properties across the UK.
Millennials are renting more, especially in city centres
Millennials have become “Generation Rent”, as a subscription-based lifestyle is now the norm. For many young adults, renting in a convenient location is more important than getting on the property ladder. Recent data shows living close to work or university, often in city centre locations, is especially important to young professionals.
When investing in a buy-to-let property, it’s important to look at what potential renters want. If investing in city centre properties, it can be worth homing in on young adults as a target market. For example, it could be beneficial for property investors and buy-to-let landlords to make eco-friendly investments, as being environmentally friendly is important to a lot of millennials.
Additionally, recent research has revealed young adults prefer unfurnished rentals. Researching how to match your property with the preferences of your target audience will likely increase your return on investment.
Manchester – a lucrative hotspot of young professionals
With property ownership amongst young adults falling, Manchester presents an exciting prospect for the buy-to-let market. This northern city is home to a large population of young adults due to its high number of students and a growing job market. In the coming years, Manchester even has room for further growth in the property sector.
Select Property Group recently analysed the opening in this city’s rental market. By 2022, job numbers are estimated to increase by 11,000 in Manchester, while only 4,000 new properties in the city centre are forecasted to come on the market.
This shows that Manchester could be a lucrative investment for buy-to-let landlords and investors, especially with a rise in young professionals wanting to rent property over homebuying.