You may already have a fairly good idea of what your property is worth to sell or let but do you know what most tenants want to be able capitalise on the trends for your current investment or your next buy? Our research may surprise you:
In the City, an overwhelming majority of our tenants (73%) are aged between 25 and 40. Their country of origin is mostly British (30%) followed a close second and third by European (25%) and American (19%). The fact that most of the City office’s tenants are home grown may come as a surprise but also reflects the trend to want to be as close as possible to work against a backlash of unpleasant and time consuming commuting. Despite this, the vast majority have moved to the City from overseas (47%) to mostly work in Finance (43%). The Legal sector was traditionally the second largest employer but they have been overtaken by the TMT sector which now sits second at 21%.
Most City tenants (54%) are single followed by couples (34%) with just 12% of households being sharers. There were no family tenancies concluded in 2015 so far suggesting that “hutching up” and “settling down” are not on the agenda for City tenants. One bedroom apartments are the buy to let of choice for many investors which is not surprising given that 84% of tenants are either single or a couple.
Tenants rent to be near work and over 90% of them rent on a furnished basis, suggesting that ownership of furniture is considered an unnecessary trapping. Corporate tenancies account for just 10% of the market however this statistic carries hidden meaning. Many tenants are issued with a housing allowance on top of their salaries and are assigned a relocation agent to help them with their home search. They have the blue chip backing but the autonomy to make their own choices about where they live.
Islington & Shoreditch
A close neighbour to the City, the data paints a similar picture with just 12% of tenants not being within the majority age group bracket of 25-40. Most tenants are European (37%) followed second by British (24%) and American (21%). They also work mostly in Finance and TMT, the local employers within walking distance. Every single let was a furnished one and just 3% were corporate lets, with the individual AST being the main tenure for reasons highlighted above.
With a strong financial district that rivals the City and sure enough, 34% of tenants – the majority – work in Finance. They are similarly aged to our other areas but half of them are British, again followed second by Europeans but with less Americans than other areas. They are mostly single (37%), in couples (38%) but with more sharers (23%). They mostly move from within the area (38%) or other parts of central London (33%) suggesting a more price sensitive market since only 17% of tenants relocate to Docklands from overseas. The spread of furnished and personal tenancies is similar to other areas.
Whilst most tenants are still within the core 25-40 age range, there is a skew of 25% in the under 25s which is reflective of the demand from students (36%) at the nearby University of London campus. They are mostly European (47%) rather than British and whilst single occupancy households are still the majority at (43%), there are many more sharers in this area accounting for 31%. There are no strong trends as to where they are moving from with an even spread of origins from the same area, central London, overseas and the rest of the UK. The largest anomaly in this local area is the amount of tenants who are prepared to take an unfurnished property which stands at 59%.
But what about when they leave; what do they do and why do they go? In 2015 only 11% of tenants left because they had purchased a property and just 2% because they disagreed with a proposed rent increase. The main reason for departure was a change in employment location (31%) forcing a move or a conscious decision to move to another area (31%) and in understanding why they go we reinforce our understanding of why they came. Tenants in central London rarely do so because they cannot afford to buy a property. They do so because they are attracted by the flexibility of renting to complement their lifestyles and work contracts. They are attracted by the flexibility rather than threatened by a lack of stability.
So what can we learn from this? In order to rent your property quickly and for the best rent, a landlord must give a tenant their wants and needs. A requirement for flexibility should not necessarily be taken for a lack of reliability or flakiness, it is merely symptomatic of their employment terms. If you understand your tenants as people then you can better understand how your investment will perform in the future and perhaps what you should invest in next.
Telephone: 020 7490 1122
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