Landlords and buy-to-rent investors will need to research property carefully if they are to meet the needs of Generation Rent or the Millennials. This generation rent is more interested in shared experiences than possessions and wants the living space to match their aspirations and personalities.
Historically, people wanted to lock themselves away behind closed doors in order to have privacy in shared accommodation such as apartments or bedsits. Things are now rather more social, with people wanting communal lounges or open-plan kitchens where they can talk and even dine together.
Investors looking at property to convert or designing new-build rental properties will need to take this need for shared space into account. These shared living spaces are proving to be particularly popular in major cities such as London.
They are akin to an upmarket cross between student accommodation and hotels with serviced apartments and shared spaces, which may include a cafe or bar, gardens, gym and a concierge or porter service.
The trend started in America with companies tapping into the Millennial market, with tenants relishing the social aspect of flat sharing but struggling to find any decent accommodation.
The lifestyle has been branded ‘co-living’ by James Scott of The Collective property company in London.
His company describes it as a new way for young people to live in cities in accommodation which offers a sense of community. As increasing numbers of young people realise that they are unlikely to be able to afford to buy a home in many parts of the UK, particularly London and its commuter belt, renting is no longer seen as a stop-gap. So they are, therefore, looking for high quality residences and are not prepared to compromise.
More people want to live in a community with other like-minded people so that they can support and help each other. To some extent, this is a logical step forward from the fashionable technology hubs offering co-working within a community with extras such as pet-friendly working environments and a disco lift, for example.
Some innovative companies are combining the two with co-working and co-living spaces under one roof. Although influenced by student accommodation, these hubs are more upmarket and may also include a crèche, cinema and workshops.
These living and working spaces could also be one answer to easing the shortage of decent, rental accommodation in the UK, providing quality and affordable homes to rent.
It is a great concept to attract tenants from the Millennial market who want to be where the action is, in the heart of a city, but who cannot afford or have the desire to buy.
It also means that younger workers can have a decent home to rent while they build up a business or career in a major city before thinking about moving out and settling down in the suburbs or another country, if that is where their work takes them.
Building decent rental accommodation in London and other major cities will also have a positive knock-on effect for the rest of the rental sector.