A survey by GoCompare revealed that when it comes to millennials – an overwhelming majority unsurprisingly prefer the cosmopolitan buzz of inner city living. When you’re looking at demographics of the PRS in London – the majority of those renting fit into the millennial category. Born between 1980-2000 – millennials are understandably unable to afford to purchase property within the city and have to heavily rely on the rental sector to provide them with the roof over their head. Alternatively, they are scrutinised for relying on the Bank of Mum and Dad. Millennials, in essence, can’t really win.
The attractiveness of London remains, with Harper’s Bazaar recently listing the capital as the second most popular city for millennials to live in the UK, with Glasgow in the lead due to property affordability – where a one-bed property in Glasgow typically costs £90,466 (putting it well below the national average) with inhabitants earning approximately £526 a week. Comparatively, Nationwide reported that on average a house in Greater London costs £455,594. Hence the heavy reliance on renting by those in younger demographics and working in creative sectors.
However, the cost of living in London, in combination with the rising rent and lack of protection for tenants – may still deter potential renters from moving to the capital.
The European perspective towards renting is slightly more relaxed than the one in the United Kingdom, where the desire to climb aboard the property ladder can often mean moving to the outskirts of a city, giving up your favourite coffee shop, and rushing to catch the last train home after a late evening at the pub.
In 2015, The Guardian reported that the average renter private tenants in the UK are paying higher rents than those anywhere else in Europe and spending a greater chunk of the average. UK rents average €902 (£750) a month in comparison to the European average of €481 (£400), according to the NHF, which represents housing associations.
More recently, the FT reported that many think the UK could solve its housing crisis by embracing a European-style rental model – which includes greater protection for tenants, caps on rent rises and longer tenancies. In 2018, a report by Centre for London reported that between 2016 and mid-2017, migration out of London was 14% higher than the previous year. Whilst the number of those leaving London might be promising in terms of availability of space, demand still massively outweighs supply – and the relationship between tenants and landlords continues to tighten.
The major difficulty, however, lies within London and London landlords retaining young generation renters whilst still providing an affordable and attractive place to rent.
So, what does this mean for those first-time buyers that want to buy property in London? Traditional agencies often do not provide potential buyers with the transparency and ease of use, creating more confusion rather than ease which millennials are used to. This is why millennials (for those that can buy) can often become disillusioned with how traditional estate agencies operate – they want to buy, but they don’t know how to buy.
As for where and how to rent, it’s a whole different ball game. One thing is for certain if London wants to continue being viewed as the metropolitan hotspot that attracts and retains millennial talent amidst political instability and rising house prices – the capital is going to have to approach the next generation of renters and homeowners with due diligence.