Gen-Y, or millennials as they are frequently called, refers to anyone born between 1981 and 1996 and describes a generation making big changes to how we live, including shaking up the rental market.
The headlines are forever putting millennial culture under the microscope, from more positive topics like the rise in numbers of vegetarians and vegans; to derogatory headlines which belittle a generation of (so-called) sensitive ‘snowflakes’ who are often dubbed as frivolous and scared of commitment. But whatever your stance on millennials, there is no question that they are turning the traditional UK housing market on its head, heralding a new age of renting.
A new report from independent strategic research and communications agency GK Strategy has revealed what this change looks like, including a rise in boutique student accommodation and a spike in popularity for in co-living developments which are more like hotels than flats, with luxury amenities and a community focus.
The report, released this month, shows that between November 2014 and November 2018, UK Google searches for terms related to ‘co-living’ increased by 3,708%, a trend which shows no signs of slowing.
It shouldn’t come as much of a surprise that luxury renting is enjoying a new-found status among 23-38-year-olds, as in the last 20 years home ownership for middle earners aged 25-34 has dropped from 65% to just 27% in favour of a different pursuit of happiness including a focus on freedom, travelling, food and luxury products.
Unlike 40-50 years ago, the popularity of the prescriptive marriage, followed by the first home, and then often a baby, has dropped, with millennials more concerned with spending their disposable income socialising, exercising and eating, according to research by Strutt and Parker. When you take into account that over two-thirds of Britain’s rental housing market is classed as unaffordable (over 30% of pay) for a 20-something year old on a typical salary, it’s easy to see why home ownership is becoming less of a priority.
Jamie Cater, GK’s Head of Policy, commented: ‘Businesses contributing high-quality, sustainable accommodation are likely to find few political barriers in their way but will need to be conscious of the views of local stakeholders, who are keen to protect the community feel for their area. Young professionals are increasingly attracted by accommodation that includes all utilities, as well as onsite gyms, libraries and other facilities, in one all-inclusive package.’
Stephen Byfield, GK Strategy’s chairman, added: ‘It’s ‘WeWork’ for housing and it looks set to catch on fast. So clever, so inventive, so investable.’
This certainly looks like a trend that is here to stay, and as such we expect to see developers pushing the boundaries of luxury and co-living developments over the next 12 months, providing a new provision of homes that suit the needs of the growing pool of millennial renters.
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