The Changing Face of How we Live, Work and Play in Cities
- 61% would consider renting when they retire
- 56% believe owning property is less important
- Superfast internet is the most important requirement in accommodation
- Energy conservation is a priority
- 56% of millennials want to be able to keep pets in their homes
London, 9 September 2019 – What used to be referred to as ‘generation rent’ is now a phenomenon that goes well beyond a narrow demographic group. Not just students and millennials but workers of all ages, including retired people, are renting instead of owning property, according to the latest research from leading international law firm CMS, in its new report Urban Being – The Future of City Living.
Research, conducted by FTI Consulting on behalf of CMS in July 2019 surveyed 6,500 people living and working in either London, Manchester, Glasgow, Berlin, Amsterdam and Paris to uncover the preferences of consumers when it comes to their living environment. It also canvassed the view of over 200 real estate professionals and 11 in-depth interviews with investors, developers and operators active in the residential sector.
With 67% of respondents across all the cities either in debt or just breaking even each month, saving for a deposit has become more difficult than ever. The wealth accumulation of the baby boomer generation in the form of owned property benefiting from decades of house price inflation has led to the rise of intergenerational wealth inequality. UK homes today cost eight times average earnings – and over 13 times in London. The ratio has doubled since 1997.
Ciaran Carvalho, Head of Real Estate, CMS UK, said: “Urbanisation, new lifestyles, different work patterns and increasing mobility are changing Europe's cities. 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.
“Our findings indicate that we are going to see unprecedented levels of interest and investment in all forms of rented accommodation in Europe’s leading cities. This will reshape local housing markets from an economic and political standpoint, but more importantly will better reflect how people of all ages want to live, work and play in our cities in the future.”
56% of respondents agreed that owning a property is becoming less popular, with 69% believing that their government should encourage more homes being available for rent rather than to buy. 61% of all respondents would consider renting when they retire, with, surprisingly, 53% of over 55s in agreement.
Ciaran Carvalho, continued: “The acceptance by the baby boomer generation that renting is an option in later life is perhaps a reflection of the changing perception and nature of later living accommodation compared to 20 years ago. It is now societally more acceptable to retire to purpose built retirement communities as the quality of the product has vastly improved. One in 200 people in the UK aged over 65 live in bespoke later living homes. In the USA and Australia it is one in 20.”
The poll asked the generational groups what were the motivations for moving accommodation, with the number one reason being the need for more living space (29%). Only the baby boomers (14%) said 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.
With the exception of the over 55s, there is also widespread agreement across the generations, that better local amenities would prompt a move, the second most popular reason given. This aligns with the thoughts of the real estate interviewees in the report who stressed that when they create residential developments today, placemaking is all important. Getting the right mix of food outlets, retail and amenities in an area makes it a much more desirable place to live.
Angus Dodd, Chief Executive, 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.”
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, reflecting the influence of technology and the rise of the ‘green agenda’ in society today. The generational groups were largely in agreement in what they wanted, with one outlier being 56% of Millennials wanting to have permission to keep pets in rented accommodation.
Rick de Blaby, chairman, Get Living, said: “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.”
A full copy of the report is available on request.