At last week’s “ARLA PROPERTYMARK” conference held in London at the Excel Docklands, hundreds of letting agents heard from Daniel Barea, Customer Insights Manager at Rightmove, that there has been a 25% growth in the Private Rental Sector since 2011 and of that increase, 37% are families with babies or children living at home. At Oasis, we have definitely noticed this increase and, along with that, the demand for houses with gardens, over apartments, has increased significantly.
A recent survey carried out by Royal London shows that 49.2% of all UK babies were born into rented homes in 2016/17, up from just one 33% in 2003/04. The so-called ‘generation rent’ is becoming ‘generation parent’ and the danger is that these families may never be able to afford to escape the rent trap, leading to other financial resilience issues for both the parents and their children further down the line. The number of families with children who are living in privately rented homes has risen by 94% in the decade to 2016/17, with 1.8 million families now in the sector and while some renters may make this a lifestyle choice, there is a concern that many households may become caught in the ‘parent rent trap’, as renters pay on average more of their monthly income on housing.
If you are considering a rental investment, why not look at the yields and Capital growth of a house rather than an apartment? The beauty of renting to families is that they are likely to want a long term let, to have more stability for their children, so if you can source a property close to good schools, parks, transport links you could find that your turnover of tenancies is much lower than with professional tenants taking apartments.
Of course, there are other factors to address when renting a family home, such as more wear and tear on the property, so it is advisable to spend more on long-lasting, good quality fixtures and fittings, and budget for the regular painting of ‘traffic areas’ such as hallways. The other advantage is that when buying a freehold property, you can be very accurate in your yield calculations because you do not have the ‘service charge’ issue that you have with apartments, especially new-builds, where the amount is unlikely to be set when you are purchasing, or you could find these charges go up annually.
Get in touch with our lettings team if you’d like more information ☎︎ 01784 779879