Market insight from Monta Capital, the property investment manager, reveals that 85% of tenants in the UK are renting through necessity, unable to afford to buy their own home.
Monta Capital recently surveyed 1,586 UK renters to find out whether renting was, for the majority of people, a lifestyle choice or necessity.
The results reveal that many tenants have been renting for a long time. Some 24% of respondents have been renting for 6-10 years; 22% have been renting for 10-15 years; 13% have been renting for up to 20 years; and 20% have been renting for more than 20 years.
While renters are renting for long-periods of time, very few appear to do so through choice. Indeed, 85% say they are renting through necessity, with just 15% saying that rent is a choice.
The overall cost of renting was cited by 33% as their biggest concern.
An even more common pain point is the lack of security provided to renters through short tenancy agreements, with 35% saying the chance that their landlord will turf them out for no good reason is the worst part of renting.
As such, 41% of renters insisted that the best way to improve the renting experience would be for landlords to offer longer tenancies thus giving people far more security in their home.
However, despite the drawbacks, tenants do attest to enjoying some aspects of the rental lifestyle.
At the top of this list, as cited by 31% of tenants, is the ability to live in a home or an area that they would not be able to afford if buying a home.
Of those surveyed 26% said they appreciated the benefit of being able to avoid the debt of a mortgage, and 24% cited the flexibility of renting as its biggest perk, free as they are to move to a new place with relative ease and freedom.
When renters are asked if they have any plans to one day buy their own home, 43% say no. And by far the most common reason why they have no plans to buy a home is because they can’t see themselves ever being able to afford it (70%).
Of the 57% who say they do have ownership aspirations, 19% say it will be up to 10 years before they think about doing so, and even then, less than 60% (59%) believe they’ll actually be able to achieve home ownership within this timeframe.
Commenting on the survey’s findings Monta Capital chief executive Thomas Balashev said that there needed to be more developers and public stakeholders willing to create rented homes with the same level of respect they do for-sale homes.
“Currently, rented homes are not held to the same high standards that for-sale homes are where quality directly impacts value. Instead, the only metric in delivering rented homes is the price point.
“We should also be looking seriously at creating longer tenancies in order to give renters the security they desire and deserve. To this end, we would love to see government legislation move with the times and push for the provision of longer tenancies”.
Not only would this benefit tenants, Balashev argued, but it would also be a huge boon for property investors.
“For residential investors, not least in the build-to-rent sector, a building that has tenants signed up for five or seven years provides much more investor security than a building where tenants only sign up for a year at a time,” he concluded.
