Landlords might feel like they have received a few blows over the years, from changes to wear & tear to tax relief on mortgage interest all but vanishing. Yet, demand from renters continues to grow, which gives reason for landlords to be optimistic.
Renting has more than doubled in the last 20 years, and the private rental sector (PRS) will make up a quarter of the entire UK housing market in less than 12 months (60% in London by 2025). If you’re currently in the business of providing homes for renters, demand is very much on your side.
Whether you’re a portfolio or single-property landlord (or maybe something in between), you can be confident about the outlook of the market. But you still need to manage tenant needs in a way that keeps them in your property for the long term.
As demand increases, the rental market will evolve further. And it’s important that savvy landlords make the right choices to handle demand from modern-day renters.
The rise of Generation rent
Renting has become such a thing that the millions of people who don’t own their home now have a specific name: Generation Rent. Around 4.5 million households (out of 19m) currently live in privately rented accommodation, which was birthed from house prices spiralling out of control.
While the initial reason for Generation Rent was due to a lack of affordability (house prices have more than trebled since the start of the 21st century), many have since embraced it as a lifestyle. And even though demand is high, renters who choose to live in rented accommodation are being more selective when it comes to the housing options on offer.
This makes sense, as they see a rental as their home and want to live somewhere with the same pride that was previously reserved for owned bricks and mortar. It means they are willing to wait a little longer to find the right place that meets their requirements.
The upside to this is that they’re also staying in rented homes for longer once they’ve found them: the average tenancy in the UK is now just over four years. Of course, longer tenancies also benefit landlords, who avoid the dreaded void period.
An evolved way of living
The living experience is changing for renters. The influx of tenants coming to the market is being met with an increasing number of living options. Build-to-rent, for example, now has more than 150,000 developments in the UK either completed, under construction or in planning.
It provides a holistic approach to living for renters, providing them with their own apartment while encouraging interactions through on-site social spaces. Co-living takes this method one step further, offering tenants a bedroom and private bathroom but asking them to share other areas, such as kitchens and lounge rooms.
While clearly popular, such living experiences aren’t for everyone. Many people navigating the rental market will still desire the more traditional setup. Yet, there are some aspects of build-to-rent and co-living that may have a far-reaching effect on the renting experience, such as the use of technology.
Using technology to handle demand
One of build-to-rent’s most significant assets is technology, but how does it work? The company who owns the building acts as the landlord, which means they’re dealing with large-scale tenancies. Therefore, it’s vital to have a system in place that makes the in-life tenancy a seamless one.
The majority of these buildings implement a scheme that centralises everything through the use of an app. Tenants can communicate with on-site managers, report maintenance and view details about their tenancy with just a few clicks of a button.
Such a process has been incredibly popular, and it’s something that should catch on in other areas of renting, making life easier for landlords, tenants and property managers. It can also give landlords the upper hand when it comes to catering to demand.
A tech-led lettings market
Most tenants are millennials, which is one of the more tech-savvy demographics. We’ve seen the rise of Netflix and Uber, along with more forward-thinking internet banking. Now the property market is catching up.
Tech-led solutions appeal to tenants as much as the old, archaic processes of in-life tenancies deter them. They’ve come to expect the involvement of technology in their living experience, and they don’t have to live in a build-to-rent apartment to achieve it.
Property managers who embrace tech setups can solve two problems in one, providing a seamless experience for renters and their in-life tenancy while also giving landlords a more transparent overview of the process.
Appealing to modern-day landlords and tenants
Centralising renting provides a better overview for all involved, with tenants able to manage their living experience with ease. The result should see them happier with their in-life tenancy, thanks to the ability to report issues and communicate with managers in just a few clicks.
For landlords, the benefit of having technology is two-fold: they can better cater to renter demand and relax, knowing that their tenants experience a more enjoyable tenancy, which will hopefully lead to fewer void periods.
They can also get a better overview of how their investment performs. For example, landlords should be able to see financial ins and outs in real time, as well as calculated void periods for the year along with access to their investment as and when they need it.
Technology fosters these capabilities, creating an ecosystem for everyone involved. Tenants manage their in-life tenancy, landlords have a complete overview of their investment, and property managers connect the dots, using tech as a smarter way to manage rental properties.
The future of the lettings market
With demand in the rental market set to increase, savvy landlords can provide appealing options for renters that go beyond the property itself. By offering tech solutions, modern-day landlords are providing renters with what they want – a seamless in-life tenancy that provides transparency and makes renting that little bit easier.