March 20th, 2018. Tom Rowlands
Why Are More People Choosing to Live Alone?
Recent reports reveal that renters are challenging the status-quo and there is now unorthodox demand for smaller, city-centre apartments in some parts of the UK. What does that mean for buy-to-let investors and developers?
Changing Lifestyle Habits and Preferences Affect Demand
Property reporter recently revealed that the year ahead will see pressure on buy-to-let investors due to changing lifestyle habits, tenants’ preferences, and governmental legislation.
Traditionally, two-bedroom city-centre rentals were popular among couples and young families, cohabitants and senior professionals. However, there has been a recent trend away from cash-saving flat shares (i.e. cohabitants) and towards one-bedroom accommodation.
Why is this happening? Well, in short, many people are now valuing their own space over cost.
And it’s not just independence people are on the hunt for, but added extras too. A recent study by Your Move has found that 28% of those surveyed would pay an average of £24 more a month if it allowed them to live with a pet. Meanwhile 21% said they would pay £19 more a month if the fee included high-speed internet, and 31% would pay £22 more for onsite creche or childcare facilities.
Other popular facilities respondents said they would be willing to pay extra for included an onsite gym or sports facilities, gardens, house cleaning services, and communal work-from-home spaces.
How Will This Influence the Market?
There is already spiralling demand for affordable housing in many of the UK’s major cities, especially London, but this new trend could see focus shift towards smaller properties with added extras.
This could mean reshuffling the traditional building plan to feature more communal areas, and possibly losing a number of apartments in order to accommodate such. However, this is countered by the fact downsizing from two to one-bedroom apartments will be able to fit more households within the floorspace.
A delicate balancing job needs to be done in order to meet demands whilst charging the correct amount to cover these additions.
Richard Truman, Head of Operations at Simple Landlords Insurance, said in a blog post:
“Spec and tenant is a bit of an egg and chicken situation. The right spec – and right extras – can help you get the right type of tenant. But if your property or area doesn’t attract that kind of tenant, high-speed Wi-fi could be an expensive irrelevance.
“It’s always worth understanding your market, looking at equivalent properties before you invest, and being flexible for the right tenants – for instance in terms of accepting pets. Just make sure you’re insured to cover any extra risks.”
Assess the Market Before Buying
Although this is a well-reported trend for the year ahead, we would always recommend conducting your own in-depth research into an area and property demand before making any purchases or deals.
Article By Tom Rowlands
March 20th, 2018
Tom joined Pure Property Finance in 2017 after a career as a Client Wealth Manager, where he spent just under 3 years advising on financial and tax planning. Tom specialises in bridging finance and property development funding, having completed deals ranging from a simple £30K property purchase through to £2m+ mixed-use developments.See more articles by Tom