Tenant Priorities in the New Normal

With rents outside of London hitting a record high in early July, up 3.4% on the same time last year, it appears that times are looking good for UK landlords.

Additionally, a boom in short term lettings thanks to the increased interest for staycations is putting further strain on the supply of long term rental units, which is contributing to higher rental demand.

However, shifts in the market bought about by Covid-19 are already starting to emerge with a recent survey already showing that tenant priorities have changed post lockdown. A trend that is reflected not just in the UK market, but globally as the effects of the pandemic on everyday lives starts to sink in.

While of course, great property will always be in demand from tenants, it’s worth noting some subtle shifts that may help you to make the right choice when investing in rental property.

Connectivity

According to a survey of 1700 tenants in the UK, fast broadband is the number one priority for tenants when choosing a home. Having always been of importance – it was previously number two on the list of must have’s for tenants –with increased working from home, has unsurprisingly taken the top spot.

And it’s not just in the UK – across the globe the rise of the “digital nomad” – white collar workers who choose to freelance from wherever they choose means that good broadband speeds are a must-have everywhere.

Access to outside space in strong demand

The most significant shift in what tenants want is around having access to the outdoors. According to the survey, having personal outside area is now the second most sought after feature (previously 7th) and renting a property close to a park or green outside space is the third (previously 9th).

Tenants are also turning to commuter towns as home working increases. While for many, they may be back to the office already, a large number of organisations are thinking more flexibly about how they work, providing tenants with an incentive to look a little further afield.

Additional space for home working

With so many individuals now set to work from home more often, or even permanently, the appetite from tenants for property which offers an area to use as office space is increasing. For some this may mean making the jump from a one to a two bedroom apartment, but also many are becoming more interested in the layout of their home making, innovative use of space to create a separation between work and home life.

Of course, while some of these trends may be as a direct result of lockdown, it remains to be seen what the “new normal” will really look like in time to come. Will outside space feel so crucial during the winter months? And will home working take off in such a big way as we start to return to a more normal working environment?

As always, for the professional investor – diversification is essential – and what will ensure that you have a portfolio that performs in any circumstance – even a global pandemic.

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