It’s no secret that millennials make up a large chunk of the private rented sector (PRS). This is the generation who are renting because they can’t afford to buy or for lifestyle reasons (greater flexibility, less responsibility and more freedom to move around).
As a letting agent, you are highly likely to be dealing with many who fit the millennial bracket and, as such, you need to understand their mindset and what they will expect a smooth tenancy process to look like.
Up-and-coming sub-sectors such as Build to Rent and co-living are making a big play for the millennial market, offering them things like on-site gyms, bars and communal facilities, free WiFi, and flexible tenancy contracts.
This generation is demanding more from their rental experience than ever before, and they are using social media and the national press to get their voices heard if their expectations aren’t met.
But what does the average millennial tenant look like and what are the services they require?
In profile – the average millennial tenant
While it’s hard to pin down what the average millennial renter looks like, there are a few common identifying factors.
They are likely to be a young professional and tech-savvy, more likely than not to be renting in a major city or town (or just on the outskirts) and happy to house-share (either with people they know or strangers).
Typically, millennial tenants will want to be close to amenities such as gyms and local parks, as well as transport links, pubs, bars, cafes, restaurants, local food markets and shops. Nightlife, outside of the current lockdown and long-term restrictions, will generally be a key consideration, as will keeping fit, having places to socialise, eat, drink and be merry.
Proximity to events and music venues will be welcome, while the average millennial tenant will also enjoy being close to cultural venues such as art galleries, museums, cinemas and theatres.
While excellent transport links are still likely to be highly important, to allow them to get around with ease (millennials, particularly in city hubs, are probably less likely to have cars, relying instead on buses, trains, bikes and walking), being close to the office has become far less important as a result of Covid-19.
Conversely, good-quality workspace at home will have soared in popularity for millennials – many of whom work in office jobs, the hospitality sector or events. It’s no longer just the need to stream Netflix, update various social media profiles and check in on the odd work email; many people are now doing all their work remotely and require fast internet speeds and uninterrupted connectivity to make this feasible.
Although it’s a stereotype, it’s also the case that millennials will spend more time on their phones, laptops and tablets, scrolling through social media, ordering goods off Amazon and watching shows on Netflix, Prime, iPlayer and Disney+. It has previously been said that good broadband is as important to young tenants, if not more important, than water or heating, while the calls for it to be treated as the ‘fourth utility’ have been loud.
That hasn’t happened yet, but good broadband will be absolutely crucial for millennial tenants. It was important before, but post-pandemic it has taken on a whole new level of significance.
Sharers, nesters and soloists
There are a number of different renting demographics to be aware of within the wider millennial tenant group.
Knight Frank’s Tenant Survey 2019 broke tenants down into a number of groups, including nesters (millennials to fortysomething couples, urban living, aged between 25-49), soloists (single flat owners from millennial to fortysomething, typically city living, also aged 25-49) and sharers (millennials to fortysomethings sharing with friends, once more with an age range of 25-49).
Other tenant groups the property agency outlined were families under 35 and families over 35, with the former usually having dependent children while the latter have dependent or non-dependent children.
Given the term millennial is generally attributed to someone coming of age in the early 21st century, and is loosely defined as anyone born between 1981 and 1996, there will be millennials in both the under 35 and over 35 families’ category.
It’s a mistake just to view millennial tenants as single young professionals. The term spans a wide age range, from people aged 39 to those aged 24, so even within the average millennial tenant demographic there will be a wide range of wants, needs and desires.
The Knight Frank survey also found that some 69% of those living in private rented accommodation thought they would still be living in the sector in three years’ time, whether through choice or necessity. So, in many cases, millennials will be long-term tenants, who may have moved around a number of times during their time in the PRS.
You can see the full Knight Frank tenant survey here. While it’s now a year old, it still offers one of the most recent and most comprehensive run-downs of tenant makeup and sentiment in the UK.
What services do agents need to offer millennials?
Though not universal, we know that the millennial generation will typically be quite tech-savvy. As a result, most will be used to digital processes and solutions, and won’t be afraid of them. Rather, they will actively embrace anything which improves convenience, speed and clarity, preferably with low costs to match.
There’s a reason why the likes of Monzo, Starling and Revolut paint themselves as millennial-friendly banks, and why millennials are also more likely to purchase things online, steer away from traditional telly in favour of catch-up services and manage their bank accounts remotely.
In other words, you should be aiming to make things as streamlined and digital as possible, with things like faster, app-based tenant referencing, deposit-free tenancies and the pre-qualifying of tenants to make life easier for both them and your landlords.
Equally, millennial tenants will be used to the all-in-one experience – for example, where they book a flight, and are then offered car hire, travel insurance, hotels and attractions all in one place.
You can offer something similar, and make more money for yourself (vital in this post-Covid world), by offering tenants financial products and services that are suitable to them, from bike, car, home and deposit insurance to income protection. Make sure this is tailored, though, as you could annoy tenants if you send them too many alerts to things they don’t want or already have.
Separately, credit-conscious renters are a good thing for you, your landlords and the tenants themselves – and many millennials, with aspirations of one day buying their own home, are likely to be very keen to improve their credit score.
One way of doing so is to report rent payments to Experian and Equifax, two of the UK’s main credit reference agencies, with a better credit rating then translating into more financial opportunities for tenants, and less risk of rental arrears for landlords and letting agents. A win-win all round, in other words.
Here at Canopy, we offer our RentTracking service to enable tenants to improve their credit history by reporting their rent payments to Experian and Equifax at no extra cost. We also offer a RentPassport, to enable a tenant’s rental and financial history to be viewed on the move, digitally – saying goodbye to endless paperwork. This is powered by OpenBanking, Experian and Plaid.
Furthermore, we have our DepositFree Insurance, allowing tenants to say goodbye to large cash deposits. This is likely to be highly welcome to millennial renters, who may feel they face significant cost barriers when renting.
You can find out more about all our services here.
The pandemic has revolutionised life, and we are now doing our bit to revolutionise renting, improving the process for tenants, landlords and agents alike.
Covid-19 has shown the importance of digital solutions and innovation, of doing things a different way, and of evolving past processes to make them fit for a thoroughly-online world.
It’s now time for us to all embrace this, millennial or not.