Spotlight on Investing in Rental Britain takes an in-depth look at Britain's rental market and also features an exclusive survey 'What Tenants Want'. Download here.

When it comes to deciding where to rent, tenants prize location and the size of the property above all else – that is the main message to emerge from our survey with YouGov.

The most cited reason for moving was in search of bigger and better property followed by a need to relocate, reflecting the flexible nature of the private rented sector. Despite rising rents, only 15% of respondents ranked rental increases as a reason for moving. The data also revealed a strong preference for locations within a five minute walk to public transport, emphasising the importance of building right on top of transport nodes.

Surveying the private rental scene

Affordability

Private renting continues to be viewed as an intermediate step to homeownership. The combination of high house prices and the constrained (although easing) mortgage lending environment means that the average first time buyer has to save a deposit equal to nine months of income. This is reflected in respondents’ reasons for renting. 57% cited affordability as a major reason for picking their current property and deposit constraints are the biggest reason. Amongst older private renters, failing to meet mortgage lending criteria is almost as important as the inability to save a sufficient deposit.

Location, Location, Location

The old adage is even more important for private renters than buyers. Analysis of the 2011 Census shows hotspots of private renting around transport nodes in London. Survey respondents ranked distance from work, shops and family as the most important factors. Location and size are among the few things most prepared to pay a higher rent for. 52% of respondents lived less than a five minute walk or cycle to their nearest public transport, which rises to 73% if you expand the catchment to 10 minutes. 66% of respondents in London rated a 10-minute journey to public transport but this fell to 47% outside London.

Reasons why they moved

Perhaps most surprising were the reasons why households moved. Top of the list is the desire for bigger or better accommodation followed by a need to relocate. Despite recent press stories around rising rents, only 15% of respondents ranked rental increases as a reason for moving. This was also the case in London which has seen the largest increases in rents with a slightly higher 17% citing rental increases as a major reason to move.

More important than rental increases was the landlord ending the tenancy. Despite this, 54% of respondents agreed that they liked the flexibility offered by their tenancy agreement and only 13% disagreed. This possibly reflects the idea that renting is still viewed as a short term situation on the route to homeownership. There is strong disagreement (56%) on the need for longer term tenancies among younger households (aged 18-24) but this changes to net agreement among those aged 35 and above.

As private renting continues to grow as a longer term tenure, tenants attitudes towards these issues will undoubtedly change and it will remain important to understand what is and isn’t important as the sector matures.

Taken from
Spotlight: Investing in Rental Britain