What used to be referred to as ‘generation rent’ is now a phenomenon that goes well beyond a narrow demographic group, according to a new report from international law firm CMS.
Titled Urban Being – The Future of City Living, the research, conducted by FTI Consulting on behalf of CMS, surveyed 6,500 people living and working in either London, Manchester, Glasgow, Berlin, Amsterdam, and Paris to uncover the preferences when it comes to consumers and their living environment.
With 67% of respondents across all the cities either in debt or just breaking even each month, the report highlights saving for a deposit as one of the main difficulties for consumers.
UK homes today cost eight times average earnings – and over 13 times in London, a ratio that has doubled since 1997.
This ‘wealth accumulation’ of the baby boomer generation in the form of owned property has led to the rise of intergenerational wealth inequality, according to the report.
56% of respondents agreed that owning a property is becoming less popular, with 69% believing that the government should encourage more homes being available for rent than to buy.
The report also revealed that 61% of all respondents would consider renting when they retire, with 53% of over-55s in agreement.
“Urbanisation, new lifestyles, different work patterns, and increasing mobility are changing Europe’s cities,” said the head of real estate at CMS UK, Ciaran Carvalho.
“We have explored how affordability and supply issues, coupled with shifting technological, economic and lifestyle factors, are shaping demand for rented residential solutions across generations and societal groups.”
As part of the group’s research, a question was asked as to what the generational groups motivations were for moving accommodation.
The number-one reason cited was needing more living space (29%), with only the baby boomers (14%) saying that they would move because they need less space – “a clear indication” that the later living model would appeal to this equity- and cash-rich group.
Except for the over-55s, the report also highlights a widespread agreement across the generations, that better local amenities would prompt a move, the second-most popular reason given.
The poll also asked what amenities people want in their next home.
First (42%) was super-fast internet, with smart meters to control energy use and electric vehicle charging points (both 31%) second.
The generational groups were largely in agreement in what they wanted, with one outlier being that 56% of millennials wanted to have permission to keep pets in rented accommodation.
Commenting on the findings, Angus Dodd, CEO of investment and development company Quintain, said: “What I like about the build-to-rent model, in the context of mixed-use development, is that there is an economic driver for us to make this place interesting, attractive, and entertaining for people, to live, work, and play.”
Rick de Blaby, chairman, Get Living, added: “We have seen the emergence of a ‘subscription society’, where people prefer to rent rather than own, from cars to music, and now to homes and furniture.
“While Millennials are seen to be the generation driving this forward, we are already seeing a trend in older generations choosing to free themselves of home ownership for a more flexible lifestyle.
“People are placing more value on experiences rather than things, and so customer service will become even more important for the rental sector.”