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Diversification of renting: Experian reveals the new type of renter, driven by declining British home ownership

Mid-life singles among the most likely groups to rent, young professionals pushed out to traditionally family suburbs from city centres

High house prices, the growing proportion of urban flats as new build properties and increased difficulty in obtaining a mortgage have combined to fuel the rapid expansion in renting, forcing diverse groups of the population to look for alternatives to buying, according to the latest analysis from Experian’s Mosaic people classification.

ONS Statistics show a reversal in the rise of owner occupation for the first time in almost a hundred years, echoing European tenure patterns. Experian data reflects this trend, finding that older groups of society are emerging as renters and are taking up affordable properties from the younger generation. This in turn causes a knock on effect as young adults are forced to rent affordably in suburbs previously dominated almost exclusively by families.

The rise of the middle-aged renters

Experian has identified a new group of people, termed Midlife Stopgap who are increasingly part of this trend – maturing singles in employment, who are renting short-term affordable homes, possibly due to the dissolution of relationships or making a new start after a career move. After students, this highly transient group has become the most likely in the UK population to rent their homes and their characteristics include:

  • Aged between 35 and 55, renting small, affordable homes – two or three bedroom Victorian or Edwardian terraced properties – often shared with other adults.
  • Typically in full-time employment with an average income of £20k - £29k; although their current status is quite transient, they have ambitions for the future and their careers.
  • Very diverse group in terms of roles, levels of responsibility and education, work in a variety of industries.

Top 10 towns for Midlife Stopgap

Torquay
Portsmouth-Central
Crawley
Penzance
Chatham
Newton Abbot
Milton Keynes
Thurrock – Essex
Birmingham – Erdington
Weymouth

“A rapid expansion in the rental sector has, for the first time, reversed almost a hundred years of rising owner occupation. Renting is no longer the preserve of the young career starters but we increasingly see groups of older people and people of varied wealth joining them,” commented Nigel Wilson, Managing Director of Consumer Insight & Targeting at Experian Marketing Services, UK&I. “A prolonged stay on the bottom of the property ladder creates a shortage of supply for newcomers, forcing them to seek alternative options. This is amply demonstrated by a recorded increase in the length of residency for younger families in starter homes, rising to 11 years from five, forcing others to look to rent property as a first step.”

Young singles in family neighbourhoods

Renting amongst younger demographic groups in city centres has been well documented, but Experian has identified a new trend within this. In London, Land Registry data says that house prices have grown by 36% in the last five years against only a 9% rise in England and Wales for the same period. This has created a polarisation of the capital and several groups of people who can no longer afford to buy have switched to renting or moved elsewhere. Flying Solo another Mosaic grouping therefore no longer seek to rent in city centres but are increasingly moving out to pleasant suburbs – traditionally family neighbourhoods – to find affordable, quality housing.

Key features of this group include:

  • 18-25 year old young singles, just starting off their careers, choosing to live in good value semi-detached and terraced properties outside of centres.
  • In contrast to many other young people, they do not live in shared houses or flats but instead live on their own, or occasionally with a partner.
  • They earn starter salaries (£15k - £19k) working in administrative and intermediate roles that give them a level of financial security and a standard of living that most are content with for now.
  • They are lovers of technology, almost all own laptops and they spend a great deal of time surfing the internet, manage their utility accounts and their grocery shopping online. They are the most prolific users of social media outside of universities, over twice as likely as the average UK population to use Twitter daily and say they couldn’t manage without their mobile phone.
  • Flying Solo is the group most likely to say they are enjoying life and are not worried about the future.

Top 10 towns for Flying Solo

Hatfield
Bournemoth - Central
Uxbridge
Staines
Dartford
Cambridge West, Cambridge
Oxford
Loughborough
Guildford
Bury St Edmunds

“Home ownership doesn`t follow the linear pattern it used to – therefore businesses need to identify how their customers have changed and what this means for their strategies when trying to market to them,” Nigel Wilson continued. “With a long term rise in renting creating higher density, less family-oriented neighbourhoods populated by people with increased disposable income due to a lack of outgoing cost on house related expenses, we expect to see an increase in demand for convenience stores and fast food chains along with more spend in bars and pubs and a shift away from family brands. As brands learn more about these new types of renters , customers can expect to see improved levels of service, with better access to types of product and facilities that they are interested in and that fit with the patterns of their lives."

Experian unveiled a new version of Mosaic on 1st April 2014, which offers new and unparalleled insight into demographic shifts in the population of the United Kingdom. Modelled using the latest Census data, Mosaic offers insight into households, living patterns and the shape of our cities.

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