With rental income shrinking the very first time inside a decade, landlords have to consider what their tenants truly value in a property.
Rental income fell by lb1.9bn from 2022 to 2022, according to a study from Hamptons International – the very first year-on-year decrease because the firm's records began in 2008.
The fall was most drastic working in london, where tenants paid lb620m less in rent this past year than they did in 2022.
Though the private rental sector has expanded over the past 10 years, it’s vital that you try everything you can to meet tenants’ needs if you want to stand out inside a competitive market.
Read onto find out what tenants are searching for, and how that you can do your very best to cater to the local demographics.
What are tenants’ top priorities?
Estate agent Knight Frank surveyed 5,000 people renting in the UK to discover what tenants’ highest priorities were when choosing a new home.
Perhaps unsurprisingly, nearly sixty-six per cent (61%) of tenants valued affordability most of all when selecting a property to rent. This was followed distantly by its location (23%) and size (10%).
Knight Frank points out this continues to be the case with all of their previous tenant surveys, hammering home precisely how important it's for landlords to cost their properties within tenants’ budgets.
There are the own costs to consider, too, so try to look for the ‘sweet spot’ where what tenants are able to afford and what you really can afford overlaps.
How to create your rent
When changing your rent, you should take into account your rental yield – your annual rental income as a number of the property’s value.
If you set your rent lacking, your profits may not be sufficient to pay off your mortgage, especially when maintenance costs and charges are taken into consideration.
But set the rent excessive, as well as your property might stand empty for months, causing you to be out-of-pocket after making the mortgage payments.
Whether you’re considering raising your rent or setting the rent for any new property, adopt these measures to get it right:
What amenities do tenants want?
‘Location, location, location’ has long been seen as the important thing to locating an ideal property. But for many tenants, it’s what’s inside that counts.
As part of the survey, Knight Frank sorted renters into eight personality types and asked which amenities they would pay more rent for.
The results proved to be highly consistent across all personalities: tenants would rather pay more for in-property features, such as en-suite bathrooms, compared to amenities in the surrounding area. In fact, an en-suite bathroom was the top-priority feature for every personality, with weekly cleaning also proving popular.
Dedicated secure parking was frequently chosen as a top-three priority, again regardless of personality, along with a local gym was deemed important. But overall, outside factors languished behind indoor features like high-end kitchen appliances, furniture and air conditioning.
Different tenants want different things
While some property features are popular across the board, it’s important to think about the particular kind of tenant you need to attract.
Knight Frank's survey identified nine different tenant groups, each using their own needs and preferences.
| Group | Percentage of tenant population (UK) | Percentage of tenant population (London) |
| Recent or near-graduates in their early 20s | 10% | 10% |
| Couples aged 25-49 | 18% | 23% |
| Individuals aged 25-49 | 11% | 10% |
| 25-49 year-olds sharing with friends | 11% | 27% |
| Parents aged 35 and under with dependent children | 9% | 6% |
| Parents over 35 with non-dependent children | 17% | 10% |
| Long-term renters aged 50-64 | 8% | 6% |
| Long-term single renters aged 50-64 | 6% | 4% |
| Renters in retirement | 10% | 5% |
More than a third of tenants in the UK are 25 to 49-year-old couples and fogeys within their 30s with older children. In London specifically, there are other 25 to 49-year-old sharers than every other group.
While the survey does not let you know exactly how to appeal to these groups, it's important to check what they may want from a home. A large flat with several bedrooms could be ideal for sharers, while a house with plenty of space might suit a household.
It’s important to think about the demographic make-up of the local area. A perfect property for sharers will probably fare much better working in london of computer will in the countryside.
Across the various tenant groups, retired renters are the most likely to expect that they'll be in rented accommodation in three years' time, with 93% giving this answer. The tenants who least be prepared to be renting in 3 years are younger couples, with 50% thinking they will own a home of their own.
On average, across all groups, 69% hope to keep renting. With this in mind, it may be a good idea to make sure your home is somewhere tenants can settle down in the future. Keeping exactly the same tenants for several years provides stability for everyone involved, avoiding costly void periods for you personally and stressful moves for them.
