A new tenant survey report highlights renters’ top priorities and what incentivises them to pay higher rents. For landlords looking to boost their rental income, our article below offers invaluable insight into what your tenants are looking for in your properties.
As the cost-of-living crisis tightens budgets, it’s becoming increasingly difficult for tenants to take their first steps onto the property ladder. As a result, many are looking at renting as a long-term solution as opposed to a stepping-stone to home ownership.
The JLL 2023 Tenant Survey Report paints a clear picture of today’s tenants, offering landlords invaluable insight into renter trends and behaviours. The report examines how often tenants move, what they look for in their homes, and how the pandemic continues to influence tenant priorities.
JLL surveyed approximately 1,400 tenants, 47% of which lived in London, with the remaining 53% spread across the UK. 89% of respondents were under 45 years old.
What motivates tenants to move?
The report found that nearly half (47%) of tenants surveyed had lived in their current property for under a year, while 29% had been in their rental property for one to two years. As such, it’s clear tenants move around more than buyers, a trend likely to continue. 80% of those asked expect to move homes again within the next two years.
Unsurprisingly, the biggest motivator for moving home was to get onto the housing ladder, with the majority (29%) hoping to buy a property. For those wishing to stay in rental accommodation, 22% want a larger property, and 17% want a more affordable location. Despite purchasing a property being the biggest motivation for tenants looking to move, 64% of those surveyed anticipate their next move to be into another rental property.
How much do tenants spend on rent?
The ongoing supply and demand imbalance continues to increase annual rents across the UK. As a result, tenants are paying more of their income on their rent than last year. The survey found that 22% of tenants spend 50% or more of their take-home pay on their rent, a 16% increase from last year. A further 38% pay 5-10% of their income on gas/electricity bills on top of their monthly rent.
How important is energy efficiency to tenants?
If you’re preparing to make energy-efficiency improvements to your buy to let properties before the upcoming EPC changes, you’ll be interested to see how important this will be to your tenants.
The vast majority (76%) of tenants state that their home’s energy efficiency is more important to them now than a year ago. Furthermore, 90% said it’s an important or crucial factor when considering their next home.
Why are tenants more focused on energy efficiency in their rental homes? A staggering 69% hope to save on energy bills. Faced with the current cost-of-living crisis, it’s no surprise that tenants are financially driven to look for energy-efficient properties. However, 28% want to reduce their carbon footprint, an increase from just 10% last year, showing how attitudes towards the environment are improving.
Are your tenants working from home?
As the pandemic drove many buyers and tenants alike to look for properties with outdoor areas and more space to work from home, the report reviews current tenants’ working patterns. The study found that this year, 28% of tenants are back in the office full-time, an increase from 16% last year. In contrast, over 70% still work from home at least once a week. A considerable 72% of tenants split their working hours between the office and from home, suggesting hybrid work is here to stay. Consequently, it’s essential to consider working from home spaces when purchasing, refurbishing or marketing buy to let properties to maximise their appeal and reduce void periods.
What do tenants look for in rental properties?
When it comes to what really matters for tenants, it’s no surprise that for 93%, broadband speed is very important or important. Energy efficiency/running costs follow closely at 91%, with private outdoor space also ranking highly (70%).
Tenants also rank an on-site concierge highly (66%), as well as on-site leisure facilities such as a gym or pool (57%) and nearby parking (50%).
What do tenants pay higher rents for?
For landlords hoping to maximise their rental yields, you must pay close attention to what tenants state they would pay premium rents for. It may be possible to improve your current properties in line with tenant responses or to keep them in mind when looking for your next property investment.
On-site leisure facilities, such as a gym or swimming pool, would most incentivise tenants to pay extra rent, with 68% prepared to pay a premium. Following just behind, 67% of tenants would pay more for proximity to public transport, and 66% are willing to pay extra for private outdoor space. Interestingly, outdoor space took the top spot for tenants last year, whilst it now sits in third place.
Shared roof terraces (35%), co-working spaces (26%), and a shared residents lounge (22%) also appear on the list.
What should landlords take away from the report?
With interest rates rising, you may be able to find ways to incorporate the survey’s findings into your own property investment plans to boost your rental income. You may be able to charge more on your rental property if it meets current tenant demands.
13th September 2023