Sharing is Caring
It’s no secret that sharing is no longer a stepping stone to ownership or single renting. Research from SpareRoom has revealed that more people than ever are sharing accommodation and the fastest-growing age bracket is renters sharing in their 40’s and 50’s.
Renters sharing aged between 43 and 53 has jumped by 300% since 2011, while 51% of SpareRoom users have returned to a flatshare arrangement after living on their own or with a partner.
According to Knight Frank, 67% of sharers also believe they’ll still be renting in three years, demonstrating the longevity within the market and where it’s expected to go in the future.
The on-going housing crisis in the UK has meant that many people have effectively been forced out of the ownership market, with property prices rising three times quicker than the rate of wages in the UK over the last 10 years.
At the same time, Generation Rent continues to be on the rise. People are increasingly looking for a flexible living arrangement where they’re not tied to one location and can move easily for career opportunities and new experiences.
Both of these factors have contributed to a rapidly rising rental market. The average rent in the UK peaked at an all-time high figure of £970, up by 2.4% (£23) during the same period last year.
This has played a huge part in the rising popularity of house sharing and ‘communal living spaces’, meaning it’s more common than ever to see two professionals sharing a two-bedroom apartment – reducing costs and maintaining a social element. This is excellent news for Buy-to-Let investors as 2-bedroom apartments are typically the optimal property type for delivering rental yields.
“Humans are a social species by nature,” explains psychologist Sam Gosling. “Our original mechanisms were to live among people who were related to us – family, extended family. But we seem to be also very good at living with people we don’t know so well. This is likely down to a pack-like mentality – when we house ourselves with others, we form a bond.
“Shared housing can be “a demonstrably positive living arrangement”, Gosling says. “As long as we are able to express ourselves adequately in the place that we’re living (a bit like we used to hang posters on our walls as teenagers), then we can, in theory, create a comfortable environment for ourselves. Plus, as house sharing becomes more normalised, the societal stigma of sharing later in adulthood is quickly waning.”
As you’d imagine, financial challenges are also lessened with the sharing of rent and bills. According to Danny Dorling, a British social geographer and professor of geography at Oxford, “There are lots of environmental benefits to sharing. When you increase the amount of people using one place, the energy used, and therefore the cost, to us and the climate, is less.”
While flat sharing was once for university students and the cast of F.R.I.E.N.D.S, it’s grown into something more. For older people who are typically more considerate in terms of time and space, having company around can be vital, creating a collaborative space when life becomes more stressful.
With rental prices consistently on the increase – the South East alone is forecasting an increase of nearly 12% over the next three years – and renters set to outweigh homeowners by 2039, the foundations are in place for investors to devise a strategy around professional sharers.
The South-East also seems like a key target in the near future with locations such as Slough heavily in demand from both professional workers and those leaving London. Nearly 46% of properties in Slough are let to London renters thanks to the incredible access the town has with the capital, alongside enviable career opportunities and relative affordability.
In turn, this makes developments such as Iron House – a residential development in Slough – a quality proposition for both investors and renters. As the number of sharers in the market continues to rise, 2-bedroom properties that can offer something for both workers will also grow in popularity. Iron House also has incredible travel links – a highly desirable trait for commuting professionals that want accessibility with London.