An influential think-tank, the Institute for Fiscal Studies (IFS), has concluded that the impression that more 20-somethings are still living at home is in fact based on fact. It found that the proportion of 25 to 34-year-olds still living with their parents has increased by more than a third in nearly two decades.
This trend, driven by increasing rental costs and rising house prices, presents an opportunity for property investors who have properties ideally suited to single-occupant living.
Rising Demand for Rental Properties
In 2006, about 13% of people in the UK aged between 25 and 34 were living with their parents. By last year, that number had increased to 18%, equating to approximately 450,000 more young adults still living in the family home.
This increase is concentrated among those in their late 20s, with men more likely than women to be living at home (23% compared to 15%).
Opportunities for Property Investors
For property investors, this trend opens up several opportunities. As more young adults look for opportunities to move out of their parents' homes, the demand for smaller rental properties is on the rise. Property investors can capitalize on this increased demand by offering affordable and attractive rental options.
Increased Rental Income and Occupancy Rates
The IFS found that finances are a significant sticking point for young adults, with rising rents and house prices fuelling the trend of living at home.
However, this also means that young adults who do move out are likely to prioritise properties that offer good value for money, and have facilities that meet their needs such as good internet connectivity. By positioning their properties as affordable and desirable, property investors can benefit from increased rental income and higher occupancy rates.
Building Long-Term Tenant Relationships
Additionally, property owners can take advantage of the opportunity to build long-term relationships with tenants. Young adults who move out of their parents' homes are often looking for stability and may prefer to stay in one place for an extended period – and if a property investor has a portfolio, they may be able to offer another of their properties to a known tenant when the opportunity or need arises. By providing a positive rental experience, property owners can attract and retain tenants for the long term.
Conclusion
The trend of more people in their late 20s still living with their parents presents another opportunity for property owners. By offering affordable and attractive rental options, property owners can capitalise on this strong demand, benefit from higher rental income and occupancy rates, and build long-term tenant relationships.