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How will demographic shifts affect landlords?

It’s no secret that things are changing in the UK housing market. We have entered a period of uncertainty where things aren’t as they used to be. Young and middle-aged people have started renting for longer and homeowners continue to get older. Not only that, but there are new regulations that landlords are having to adjust to. 

On top of the demographic changes, there is also uncertainty thanks to Brexit – something that has been impacting the market since the vote to leave in 2016. But what does all of this mean for you as the landlord? Well, let’s break it down a little. 

The Increase in Older Renters

Young people are now half as likely to own a home as they would have been 15 years ago. Not only that, but house prices have doubled and a tiny percentage of young people own a home. However, it is 35-49 year olds who have become the most common occupants of private rentals. 

For landlords, this means you have a whole new market to cater to. Statistics show that older renters are more interested in energy efficiency in their accommodation and there is also the need to cater to those with families that have young children. Younger tenants are also becoming more interested in co-living arrangements, which is spreading to older renters. 

The Expectation for Boomers to Sell 

Almost half of the housing market comprises of Baby Boomers, and over the next 20 years, they are expected to downsize their accommodation. The rise in supply will slow growth and enable new buyers to get on the property ladder with greater ease. 

This can be good and bad for landlords. More people buying homes does mean fewer people renting, but there is also a 5% drop in house prices expected when this happens which means good opportunities for buying new rental properties. 

This also gives the opportunity to develop properties to better suit the next generation of renters, who already want more private rentals that allow pets as well as eco-friendly features and small things such as gardens. 

The Impact of Brexit 

Unfortunately, we still can’t be entirely sure how Brexit will continue to impact the market. There have been drops in rentals due to a lack of EU migration and university applications, but whether the future will hold the same (or more) issues remains uncertain. 

The demographic shifts don’t actually have to negatively impact landlords, and there are actually some great opportunities for future investments and development. The market is absolutely changing, but there’s a lot of good to come from it. 

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