The average UK rent has increased by 2% year on year according to lettings agent Countrywide. Rental demand in the UK is on the rise, with an increase in the number of students and young professionals looking to rent a property with their friends, family or work colleagues, rather than live alone.
For many young professionals, renting is far more desirable than attempting to get a foot on the property ladder.
City Centre Living
Often students finish university and want to stay in the area where they have studied, living with the friends they have made, during their time at university. Renting a HMO (home of multiple occupancy) gives young professionals a chance to live together, share living costs and continue to live to the same standard of living they have been accustomed to as a student.
A number of student areas are located in the centre of cities, which can mean that the average house or apartment in the same desirable location is financially out of reach.
Rent is often a much more affordable option, as there is no deposit to save, legal fees to pay or maintenance fees to consider, when moving into a property. Renting will require a deposit, but it is often only one month’s rent, in advance. In addition, renting can also mean that you can afford a far bigger property than you could if you were to buy, especially if you plan to split the cost a number of ways between your housemates.
If you want to live in a city centre or close enough to commute to work, property prices can be very expensive. If you plan to buy, you would likely need a deposit of approximately 10% of the asking price. These figures have been taken from a recent Telegraph article, about the rise of HMO properties. (1)
Unfortunately, for those looking to get their foot on the property ladder, you could be competing against a number of overseas cash buyers who are quick to snap up many affordable properties as soon as they come onto the market, especially in the Capital.
The rise in UK rental demand could be down to the increase in the number of students seeking student accommodation and HMOs. Recent figures on rental returns highlight that Manchester has one of the largest student populations in Europe, with rental accommodation demand rising. In addition, this year UCAS received it’s highest number of university applications, at 592,290 applications despite a hike in tuition fees.
These days, many young professionals jump from job to job every couple of years in order to gain experience and further their career. This has been referred to as career cruising in a recent employment survey conducted by Accountemps, highlighting growing career trends. (2)
Being tied down to a property is definitely not suited to career cruisers as they will often move to different cities to pursue their career.
Moreover, many students live and study in a new city during university and many choose to move back home once they have graduated. This means that most students will choose to rent with their friends during their second and third year at university, so that they have the flexibility to move back home once they have finished.
A number of young professionals still prefer to live in a rented HMO ( home of multiple occupancy) property with their friends or fellow colleagues rather than live alone, after university.
The student/ young professional rental demand life-cycle is extending from 18 years old heading towards the late twenties, thanks to the number of young professionals continuing to live together post-university.
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