This is an extract from Goodlord's new e-book, How Generation Rent will transform the lettings industry. Download it today.
In 2025, it’s predicted that half of those in the 20-39 year old age group will rent within the UK1. This group, a third of whom are likely to rent for their entire lives (double the amount of lifelong renters from the previous generation)2, has become known as “Generation Rent”.
Generation Rent is primarily made up of millennials, defined by the Pew Research Centre as being born between 1981 and 19963. They’re digital natives who have grown up in or come of age during the era of the on-demand economy, where technology and its capabilities have allowed the consumer to fulfil their demands with the immediate provision of goods and services.
This means they expect a seamless, digital-first proposition from businesses and services - and their expectations are getting higher all the time, with 66% of 18–34-year-olds saying they have higher expectations of customer service than they did a year ago4. If businesses or services fail to meet their expectations, they’re not afraid to wield their influence, either - millennials are 43% more likely to “call out” a brand on social media for a negative experience than other generations5.
Traditionally, letting agents haven’t focused on the experience of their tenants but this could be set to change, with Generation Rent likely to have increasing influence on the lettings industry. Legislation of the private rented sector is increasingly favouring the rights of the tenant. The introduction of the Tenant Fees Bill and changes to Section 21 follow on from campaigns by organisations such as Shelter and Generation Rent, which attracted widespread support.
The ban on tenant fees in particular will also remove one of the barriers to moving for Generation Renters, so it will be easier for them to leave a property - and an agency - if they’re unhappy with their experience. Additionally, with more and more landlords leaving the market, it will be more important than ever for letting agents to demonstrate they can attract and retain the best tenants in order to attract and retain their share of an ever- smaller pool of landlords. “Landlords are very conscious of how we treat tenants,” says Christian Breen of Greenwich Peninsula in London. “Tenants could also know people who are landlords, or they could be landlords in the future, so it’s important for your reputation that they have a good experience.”
Samuel Fitz-Hugh of Manchester’s Settio Property Experience believes improving the tenant experience could be “gold dust” for agents who are looking to reduce their costs and increase their revenue. “Every time you have to find a new tenant, it costs your agency time and money,” says Fitz-Hugh. “Landlords are buying a property because they want a yield - so the best tenant is someone who moves in as soon as possible, stays for ten years and increases their rent every year.”
1). UK housing market outlook: The continuing rise of Generation Rent, pwc.co.uk 2). Up to a third of millennials ‘face renting their entire life’, bbc.co.uk 3). Defining generations: Where Millennials end and post-Millennials begin, pewresearch.org 4). 2017 State of Customer Service Report, info.microsoft.com 5). Call-out Culture: People, Brands & the Social Media Power Struggle, sproutsocial.com