As house prices continue to rise, millions of people in the UK now belong to ‘generation rent’. The national average asking price hit £308,750 in May 2018. Out of both preference and necessity, this group of young adults doesn’t expect to get a ‘foot on the ladder’ anytime soon and, as a result, is largely responsible for the UK’s build-to-rent boom.
This increase in demand must be met with an educated response. Put simply, anybody in charge of providing rental properties needs to understand their market and know what is important to renters.
With all that in mind, here is everything you need to know when you’re marketing to Generation Rent.
Reaching out to Generation Rent
The problem is how to reach out to them. We’re talking about a generation that has been marketed to, re-marketed to, and advertised to across a wide range of platforms for as long as they can remember.
They’re difficult consumers, and they’ve almost grown immune to your efforts. Couple this with their transitory, hard-to-pin-down lifestyles, and it’s clear that Generation Rent (and the millennial group as a whole) is the new problem child of the property sector.
Fortunately, all it takes is a little understanding and a lot of options.
Renting out of necessity
Currently, you need to have saved a deposit of between 5% and 20% of the cost of your desired home, and for first-time buyers it’s often at the far end of that scale. For example, if you’d like to buy a home priced at just £150,000, you’d need to have saved £7,500 which amounts to 5%.
As it stands, barely half of all families in the UK are homeowners.High house prices, stagnant income growth, and tighter lending policies have all made homeowning harder for first-time buyers since the early 2000s.
The British dream of homeownership is an unrealistic prospect for millions of millennials across the UK. Renting is much more viable.
It also suits the millennial lifestyle…
Renting out of preference
Research carried out by AXA Insurance shows that renting actually suits the millennial group and the lifestyles of its constituents, far more than owning homes of their own does.
The AXA Tenant Survey (the sample for which was 47% millennials, 28% 45-65-year-olds, and 25% over-65s) shines a light on millennial lifestyles.
It found that 17% of the millennial participants say that they are renting simply because they prefer the freedom and flexibility.
As such, renting is no longer solely a temporary stopgap for those who plan to purchase their own homes. It’s clear that renting has become a choice alternative. Generation Rent is an emerging group that wants the freedom to take off whenever it wants to, without the burden of mortgage repayments.
For a lot of people, there are two alternatives to purchasing homes: renting and living with parents. Figures from the Office for National Statistics show record levels of young people (20-34) living at home with their parents – the number currently stands at 3.3 million.
What’s more, according to the ONS, the average house price for first-time buyers has increased by 14.8%. The average income has grown far too slowly alongside these fast-climbing house prices, increasing at just 4.2% in the same period.
Providers need to meet this increased demand with high-quality properties and living spaces, and landlords need to act responsibly.
The build-to-rent sector is booming, and there is great profit to be made, but it shouldn’t be at the cost of tenants’ experiences – their living spaces should come with the same comfort and security as mortgaged homes would.
Marketing to Generation Rent
Now that we understand the conditions in which Generation Rent has saturated the rental market, we can begin to market to them. Here are the marketing essentials that you need to keep in mind.
One thing that we’ve learned about millennials and Generation Rent is that experiences and instant gratification are more important than material goods. In the face of student debts, the millennial group contains some of our biggest spenders in the UK.
According to research from investment firm CBRE, millennials spend around 50% of their disposable income on leisure, from nights out and non-food shopping to eating in restaurants and goings to the cinema.
It’s something that property developers should take into consideration –are you giving your tenants enough for them to lead this kind of lifestyle? City-centre locations have always been important, but now it’s less so for the distance of their commutes than for the numbers of nearby eateries and shopping spots.
Making a house a home
Homeware is arguably more important to tenants than it is to homeowners. Lacking that sense of ownership and, often, the ability to customise their property, tenants are more inclined to spend money on homeware that they like the look and feel of.
In fact, UK consumers spend more than £12 million each year when they’re moving into new rental properties. ‘Forever furniture’ is a thing of the past, and people aren’t as likely to own their sofas for more than a few years each. There’s a reason why houseplants are more popular than ever.
So, when you’re marketing to Generation Rent, you need to emphasise the potential of the space. Emphasise its possibilities, and communicate the versatility.
As we mentioned earlier, responsible (and responsive) landlords are a must. The same goes for on-site maintenance teams – if anything goes wrong, Generation Rent wants it fixing as soon as possible.
When a tenant moves in, make sure that you conduct regular inspections and arrange an available point of contact, should anything go wrong.
When you’re marketing to Generation Rent, you need to be as direct as possible. Leave no room for misunderstanding, and talk on their level. If a millennial has come across your site, they’re looking for their next living situation, and this means that they’re potentially stretched for time.
The key is to get your headline right. Understand their problem, speak to their situation, and offer them a solution. And, not forgetting the oldest lesson in the book: sell the benefits, not the features. As advertising giant and ‘America’s Greatest Salesman’ Elmer Wheeler once said, ‘sell the sizzle, not the steak’.
Live-stream an open house
Being on social media is one thing, and live-streaming an open house is another – it’s something that more estate agents need to be doing if they want to reach younger audiences.
With busy work schedules, many millennials can’t attend 9-5 viewings. In that sense, live streams are perfect, because they actually boost competition and should increase the number of people interested in the properties.
Generation Rent craves openness and dialogue, and its constituents will appreciate you giving them options.
This dialogue is best met with an ongoing series of blogs that not only speak for your brand, but give prospective tenants valuable insight into your properties. Like the live-stream, this millennial group will appreciate content that makes it easier for them to make decisions.
These are busy people, and as we’ve mentioned they are up against it what with sky-high tuition fees. Understand their difficulties, and ensure that your content solves their problems and gives them a clear idea of what living in your properties will be like.
There you have it! For a long time, the property market has worked against millennials and it continues to give them an uphill battle. This is why your marketing must focus on them, rather than bombarding them with irrelevant, sloppy messaging.
We at theEword can help. We specialise in property marketing, and have a proven track record of communicating with this target audience. It’s what we do. Check out our free guide to online property marketing here.