Vast majority of renters say they have no other choice than to rent

85% of tenants in the UK are renting through necessity, unable to afford to buy their own home, according to new market insight from Monta Capital.

Related topics:  Landlords,  Renting,  Homeownership
Property | Reporter
18th March 2024
"Currently, rented homes are not held to the same high standards that for-sale homes are where quality directly impacts value. Instead, the only metric in delivering rented homes is the price point"
- Thomas Balashev - Monta Capital

Monta Capital has commissioned a survey of 1,586 UK renters to find out whether renting is, for the majority of people, a lifestyle choice or necessity, and to understand more about the things that people like and dislike about living as a tenant.

Lifelong renting

The survey starts by revealing that many tenants have been renting for a long time. 24% of respondents have been renting for 6-10 years; 22% have been renting for 10-15 years; 13% have been renting for up to 20 years; and 20% have been renting for more than 20 years.

While renters are renting for long periods of time, very few appear to do so through choice. Indeed, 85% say they are renting through necessity, with just 15% saying that rent is a choice.

Monta’s Chief Executive, Thomas Balashev, says that because of this fact, developers have an obligation to provide renters with the best possible homes, not least by providing the longer-term tenancies that so many renters are craving.

Tenant frustrations

Over these many years of renting, tenants are confronted with many points of frustration.

First of all, there is the overall cost of renting which 33% of tenants cite as their biggest concern.

An even more common pain point is the lack of security provided to renters through short tenancy agreements, with 35% saying the chance that their landlord will turf them out for no good reason is the worst part of renting.

As such, 41% of renters say that the best way to improve the renting experience would be for landlords to offer longer tenancies thus giving people far more security in their homes and enabling them to relax and lay down roots without the fear of being evicted through no fault of their own.

The perks of renting

However, despite these drawbacks, tenants do attest to enjoying some aspects of the rental lifestyle.

At the top of this list, as cited by 31% of tenants, is the ability to live in a home or an area that they would not be able to afford if buying a home.

26% say they appreciate the benefit of being able to avoid the debt of a mortgage, and 24% cite the flexibility of renting as its biggest perk, free as they are to move to a new place with relative ease and freedom.

Ownership aspiration

When renters are asked if they have any plans to one day buy their own home, 43% say no. And by far the most common reason why they have no plans to buy a home is because they can’t see themselves ever being able to afford it (70%).

Of the 57% who say they do have ownership aspirations, 19% say it will be up to 10 years before they think about doing so, and even then, less than 60% (59%) believe they’ll actually be able to achieve home ownership within this timeframe.

Thomas Balashev, Chief Executive of Monta Capital, comments: “If the vast majority of people are renting through necessity, I believe that there is a significant burden and moral obligation to provide them with quality, nourishing homes

"Let’s use an analogy, albeit one that might not be very popular among certain groups: for many kids in this country, their school dinner is the best, if not only opportunity to eat a good, nutritious meal every day. Because of this, schools have an obligation to make sure that the food they’re putting on kids’ plates is healthy and nutritious.

"That plate used to be piled high with turkey twizzlers and chips, but now our society has evolved and learned that this is damaging and immoral, so we have changed our ways.

"The same revolution needs to happen with our housing, an objective which is entirely achievable if only enough developers and public stakeholders were willing to create rented homes with the same level of respect they do for-sale homes.

"Currently, rented homes are not held to the same high standards that for-sale homes are where quality directly impacts value. Instead, the only metric in delivering rented homes is the price point.

"We should also be looking seriously at creating longer tenancies in order to give renters the security they desire and deserve. To this end, we would love to see government legislation move with the times and push for the provision of longer tenancies.

"Not only would this benefit tenants, but it would also be a huge boon for property investors. For example, when a commercial building is sold with an existing 20-year tenancy agreement in place, its value is higher than if the current tenancy expires in 12 months.

Thomas concludes: "So for residential investors, not least in the build-to-rent sector, a building that has tenants signed up for five or seven years provides much more investor security than a building where tenants only sign up for a year at a time.”

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