What do tenants want?
In September we carried out our first large-scale survey of tenant opinions, triggered by two factors. First, we kept reading in the national media that ‘most tenants’ were renting reluctantly and this generalisation felt inaccurate. Second, we are always interested in how we and our landlords can better serve those people who choose to rent through Finders Keepers.
Over 600 people responded, and a big thank you to all those who took part. We launched a selection of the results at Property Intelligence 2012 and more detail is shown here.
Context: Ages & Segments
The 600 respondents skewed towards the younger age brackets: 42% were below 30 years old and 75% under 40 years old. About 9% were over 50 years old and a further 3% over 60 years old. We have to assume this is a typical breakdown of those in rental accommodation although a research bias may be at work, eg younger people might be more willing to complete an online survey.
57% of the survey defined themselves as living alone or with a partner, 22% were families and the rest were a mix of sharers, post-graduates and corporate tenants.
The big question: Are you a “reluctant renter”?
The results are fascinating: 40% of the survey said ‘yes’ and 60% said ‘no’. However, as with most research, the headline answer is misleading. We asked why people are renting reluctantly and found that 35% of them (so that’s 35% of the 40% who are reluctant, which is 14% of the total sample) are more ‘frustrated buyers’ than ‘reluctant renters’ as they are waiting for the market to fall, in the process of buying a house or ready to buy but unable to find the right property (Figure 1). The latter reason may be indicative of the relatively strong sales market in Oxfordshire.
The remaining 65% of the 40% (or 26% of the total sample) are those ‘reluctant’ people you might have been reading about in the press. They tend to be saving for a mortgage deposit or struggling to agree a mortgage. Mortgage lending criteria have changed dramatically in the recession and now it is the younger, first-time buyers who are feeling the effect.
Why are 60% of the survey happy to rent?
The main reasons being that they like the freedom to move; they are not ready to buy; or they are getting to know the area. Interestingly, 22% of this 60% say they can live in a better property by renting than by buying a home, which could be a reflection of both the increased standards of furnishing and the fact that sales prices are still beyond many people.
What do you look for in a property?
We are firm believers that good furnishing attracts the best tenants, but even we are surprised that ‘Lowest rent possible’ only comes 5th in priority (Figure 2) and that the cleanliness and quality of the interior is more important. Even though many tenants are saving for a deposit, they still want to live in a clean, comfortable and stylish home. This supports the long term trend of the past 15 years of ever-increasing aesthetic expectations among tenants. The answers about gardens and schools may be reflective of the relatively young age of the respondents. The low score on ‘nightlife’ is ominous for Oxfordshire’s leisure industry!
Would you like a long tenancy?
Some stakeholders (eg think tanks, charities) in the rental industry are advocating long, European-style tenancies of 5+ years, but our survey does not support this. Only 6% of respondents want a tenancy agreement beyond 3 years and 80% want an agreement between 6 and 18 months. It could be that we are really a nation of homeowners – or aspiring homeowners – and so a 5-year tenancy is not part of enough people’s goals.
What would make you stay in the rental sector longer?
It makes sense that ‘Investing to keep the property in good order’ and ‘Swift repairs’ are the most popular answers (Figure 3) as these directly affect the quality of life in the property. The desire to personalise the home is understandable but a very difficult area as individual tastes can negatively affect the re-letting of a property. Any ‘personalisation’ must be agreed in detail and in writing between tenant and landlord. The option to ‘Rent to buy’ (where the rent goes towards a potential purchase) will suit a minority of landlords and a formal contract is required.