While anecdotal evidence will be enough to tell you that young adults are more likely to make a move in the buy to let market as opposed to buying property, this has been confirmed by recent findings of the IFS, the Institute of Fiscal Studies.
Even a difference of five to tend years is noticeable in the split between tenants and homeowners and this is something that landlords and property investors should consider.
It is important to know which way the market is heading, and it is important to know who your audience is. A good landlord understands that there is a likely tenant that will be right for their property, and this should influence the way the landlord promotes the property. When you have a clear tenant in mind, it becomes much easier to reach out to this tenant, both with promotion and in the way that you present the property.
Property prices are rising and this shapes the buy to let market
The main reason why so many more young people are unable to afford to buy property is not new or surprising, it is down to a 152% increase in average property prices. The IFS report found that for the age-group who were born in the last 1980s, home ownership stands at a level of 25%. For people who were born just five years earlier, the rate of property ownership stands at 33%. When it comes to the market of people who were born in the middle of the 1970s, homeownership stands at 43%.
While property prices have risen, the IFS believe that the key factor in the decline of property ownership comes with how these prices have risen in comparison to income. The rise of property prices between 1995/95 and 2015/16 stands at 152% but for real net family income for people aged between 25 and 34 years old in the same time-period, the increase is just 22%. With this backdrop, it is no wonder that people have found it impossible to step on to the property ladder.
Landlords have an opportunity
This has fuelled the increase in people joining the buy to let market and while this is unwelcome news for some people, it will be of benefit and interest to landlords and investors. When there is an increased level of demand for rental accommodation, it is not unreasonable to assume that this will shift to a rise in rental fees. There is a need to be aware what the upper limit is with respect to what people can afford to pay for rental fees, but landlords will see an opportunity to provide a service that meets demand. Of course, providing a high standard of service can increase the level of rental fee that some tenants are willing to pay so savvy landlords know that sound investment plans can help to drive their profits while ensuring tenants are delighted with what they receive.
Landlords operating in and around Brixton have many local aspects to consider, but there is no denying that the issues impacting the national rental market are relevant here. Meeting the news of a youthful audience is a huge factor for landlords to consider in the present day.
