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1st May 2024|News|BTR & Asset Management|

New Research Unveils What Tenants Want In Their Rental Properties

In the rental market, what tenants want can differ drastically based on demographics, and truly understanding the desires of your target tenant demographic is crucial. By catering to their preferences, you can enhance the attractiveness of your investment property, increase your asking rent, reduce the risk of void periods and attract the kind of tenant you desire. This is something we’ve explored in our first-party research – Smart Investing – where we asked tenants of different ages, backgrounds and household setups what they were looking for in their rental properties. Here’s what we found out…

Older Tenants Want Long-Term Rentals

In recent years, there has been a notable uptick in the number of older individuals seeking rental housing. According to the National Housing Federation, nearly 867,000 households led by individuals aged 55 or older now reside in privately rented properties, marking a 70% increase in senior rental households across the UK. As such, landlords who are looking to invest in buy-to-let properties would be wise to take heed of this expanding demographic of senior renters.

This is something the Smart Investing research corroborates, with this data indicating that renters aged 54 and above present an attractive prospect for landlords aiming to minimise tenant turnover. This demographic exhibits the lowest inclination to consider relocating from their current rental accommodations within the next two years. In contrast, respondents across all age groups from 18 to 54 are more prone to considering a move within the next 6 to 12 months. In fact, a majority of respondents in the 54 and above age bracket expressed intentions to remain in their rental properties for over 24 months. So, if tenant retention is at the top of your priority list, don’t discount the value and preferences of older renters.

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Families Want More Space

Based on data from the Office for National Statistics, it is estimated that 38% of households in the private rented sector consist of families with dependent children, totaling around 1.7 million households. These families tend to have distinct priorities compared to single renters or those without children, with a strong emphasis on proximity to educational facilities such as nurseries, schools, colleges, and universities.

As a result, families tend to remain in their rental accommodations for longer periods, seeking stability for their employment, their children’s education, and their social connections. This stability presents an attractive prospect for investors aiming to minimise tenant turnover and avoid periods of vacancy, much like with older tenants.

This is supported by the Smart Investing research which indicates that amenities like parking spaces and garden areas are particularly important for families with children. In fact, 81.5% of respondents with children stated that parking was of importance to them, while 83% deemed garden space important. Consequently, for those considering purchasing properties tailored to family needs, suburban areas may offer more suitable options than urban centres, as suburbs typically offer a greater abundance of houses with gardens and parking facilities compared to densely populated city cores.

Renting With Co-Tenants vs. Renting Alone

Approximately 21% of our survey participants indicated that they were residing alone, which clarifies why the majority of this group opted for the lowest rental range, typically between £700 and £800 pcm, as single-income households. These individuals, living independently, prioritise cost efficiency in their rental dwellings, with a preference for energy-saving amenities, recognising the economic benefits such features can yield.

In contrast, married tenants benefiting from dual incomes typically allocate a higher portion of their budget to rent, sitting at an average monthly expenditure of £1000 to £1100. Their preferences markedly differ from single tenants as they prioritise amenities like parking, and state that they are willing to pay extra for this convenience. In fact, a recent study in Belgium shows that couples are more likely to own a car compared to sole tenants. This underscores the importance of parking amenities for couples in rental properties. Investing in properties tailored to couples and understanding what tenants want, such as spacious one and two-bedroom units with adequate parking provisions, could significantly enhance the appeal of properties within your portfolio.

All Tenants Want BTR

Irrespective of location or age demographic, our survey participants overwhelmingly expressed a preference for transitioning to Build-to-Rent (BTR) developments in the future. A huge 46% of those surveyed indicated their intention to make their next move into a BTR unit, which is a testament to the impact this relatively new property type is having on the UK property market. 

While individual landlords may not have the option to invest in standalone BTR properties, this data remains valuable, highlighting a strong demand among tenants for the security and sense of community provided by BTR accommodations. There appears to be a prevalent concern among Private Rented Sector (PRS) tenants regarding the uncertainty of long-term residency, stemming from the possibility of landlords selling their investment properties or reclaiming them for personal use— a concern less prominent in BTR units.

Moreover, BTR tenants typically enjoy access to a broader array of amenities. This appeal of community, stability, and amenities is solidifying BTR as a significant contender in the residential property market. PRS landlords should take note of this trend toward modern living solutions such as BTR as a signal that what tenants want is a secure, modern and community-driven way of living and adjust their offerings accordingly.

Explore the Smart Investing research

Having compiled data from 600 tenants across the UK, Centrick has been able to get to the heart of what tenants across the UK are looking for through our Smart Investing research – whether it be parking facilities for couples, gardens for families or rental stability for the older generation. Want to uncover more of Smart Investing’s exclusive insights into what tenants want, how to choose the perfect buy-to-let property, and how to propel the success of your property investment portfolio? Download the guide by filling out the form below:

Download Guide - Smart Investing

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