It has always been common knowledge that it was younger generations that dominated the PRS and according to recent findings, this is still very much the case with thirty-somethings dominating the private rented sector (PRS).
In their latest rental index, the lettings platform Goodlord looked into the demographics of renters within the PRS nationwide, as well as average rents, tenancy terms and void periods in January. In their index, they found that millennials continued to take up the largest portion of the PRS. When reviewing tenant demographics, Goodlord looked at the average age and salaries of tenants in eight regions of the UK. In the index, the results found that the average tenant was aged 33 and earning an average salary of £24,197 per annum. The oldest tenants could be found in the South West where the average tenant was aged 35. The youngest tenants could be found in the North West and West Midlands where tenants were aged 32 on average.
While the average age of tenants is still relatively young, it appears that the average age of tenants has increased in the last decade. In the latest ONS Housing Survey, there was a considerable increase of people renting well into retirement age in the last ten years, and the number of owner-occupiers aged between 35 and 44 had dropped by 12% in the last year. As well as this, the number of younger people aged between 16 and 24 in the private rented sector has dropped from 17% to 12% in the last ten years, suggesting that the current younger generation are choosing to move out of their family homes later than previous generations.
It seems that affordability is a key reason for people renting for longer periods of their lives. According to their study, Goodlord reviewed the average salaries of tenants across the country and they found that on average, tenants were spending around 57% of their monthly salary on rent (when including those living in London). This was echoed by similar research carried out by Benham & Reeves last month, where it was found that tenants were spending as much 75% of their income on rent. When you look at these figures, it should come as no surprise that tenants are choosing to stay at home for longer and struggling to fund a deposit for a house. As well as affordability, it also seems that renting is more suitable for tenants in the modern age. With more people choosing to move around for job opportunities and personal reasons, renting offers the flexibility that a lot of people are looking for.
In other areas of the private rented sector, it seems that the market is looking strong overall. Despite average rents for the UK overall dropping from £902 to £874 between December and January, most regions saw their average rents increasing or remaining steady from the previous month. Void periods have also remained steady since December where the average void period for the UK was 20 days.
Tom Mundy, COO at Goodlord, said: “it’s encouraging to see void periods hold steady across winter, landlords and agents will be hoping the dip in average rental costs is simply a hangover from the Christmas season. We would normally expect rental averages to hit their lowest levels between December and February, so this isn’t unexpected – we should start to see stronger metrics in the not too distant future.”
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