The Generation Game
Benjamin Franklin might have added a several more certainties to his famous quote “Nothing can be said to be certain, except death and taxes”. “Cyclists will ignore the new cycle lanes on Heaton Road and continue to use the road and pavements just like before” could be one? Another could be “Each new generation is doomed to suffer the sneers and barbs of the generation before”.
The sneers usually turn out to be wrong. For my generation, it was mostly “You are not going out of the house dressed like THAT?” Or “You call that music? Pah”. Yet we mostly turned out OK. Generation X have not spent their lives under the duvet watching MTV or sleeping, as predicted by a gleeful media around the millennium.
And so, we come to the millennials, Generation Y. As this group moves into the workplace they are proving that far from being ‘Generation Snowflake’ they are embracing the challenge of 24/7 digital technology, changing lifestyles and new working patterns. Once again, proving the old guard wrong.
Yet despite access to a wealth of technology and lifestyle choices, Generation Y is starting out with bigger burdens than any since the early 1950’s. The recession of 2008 is still having a major impact upon wages while spiraling house prices have put early home ownership firmly on the back burner. Add an average student debt of £45,000 and Generation Y can be forgiven for asking “Why me?”
A recent survey of Millennials by property specialist CBRE threw up some predictable results. No surprise that 64% are renting with 65% citing financial circumstances as their reason. 41% live with their parents with 46% of those stating that they plan to leave within two years to move into rented accommodation. Given that Millennials spend almost 50% of their disposable income on leisure it seems Generation Y could fairly be renamed Generation Rent?
The challenge for the rental sector is to provide the high-quality accommodation required by today’s young professionals and to develop innovative ways to allow them to afford this level of quality. Our ProShare Plus scheme allows young professionals to share larger properties at a fixed, all-inclusive rent. This allows them to create their own flexible micro community with minimal hassle.
So, all the indications are, we need a buoyant rental sector for the foreseeable future. Good news for the buy-to-let landlord you might think? Possibly not. New regulation in the lettings sector means compliance must be paid for and the abolition of letting fees will inevitably result in higher rents so the tenant is hit.
More stringent mortgage requirements are hitting landlords, as is the very digital technology Generation Y takes for granted. Online estate agents promise cost benefit to the vendor by swapping an estate agents percentage fee for a flat fee. But all too often we see online estate agents undervaluing property for a quick sale. Of serious concern is the effect of this under valuation upon the remortgage market which landlords need to finance their next project.
Generation Rent seems here to stay but current legislation and market trends seem set to suppress the vital buy-to-rent sector. The lettings sector must prepare for the inevitable rise in demand as best they can so I will finish with a final quote from Benjamin Franklin. “Without continual growth such words as improvement, achievement and success have no meaning”.