Generation rent is another mega trend being driven by demographics. The number of 18-year-olds in the UK is expected to grow by about 16% by 2030* and, with more university age people in the UK, demand for purpose-built student accommodation is expected to increase. The good news here for investors is there are also REITs that own, operate and develop this next generation of accommodation for students.

A second element to generation rent is that renters are increasingly choosing to rent from professional landlords as opposed to amateur buy to let landlords. Far from an old Victorian house converted into rooms or flats, these developments are modern, purpose built, and affordable. Often offering gyms, cinemas, games rooms, concierge facilities, communal lounges and bike storage areas, apartments in these types of buildings are increasingly in demand from younger people who are mobile, have busy and active lifestyles, and want a home that supports them. And, once again you can get access to the next generation of assets via the listed market.

Home ownership is an aspiration that has stood unchallenged for decades, yet it is a relatively recent phenomenon. In the early 20th century, most of the UK’s population lived in rented accommodation with three-quarters of households classed as private renters in 1918. This number fell to just under a tenth of households by 1991**. The trend has reversed somewhat since the early 2000s, with the English Housing Survey finding that the number of people living in the private rented sector has increased by 124% since 2000***, as a failure to increase the quantity of housing in order to keep up with rising demand has led to residential property prices spiralling upwards.

Go back to Mega Trend 2: Digitalisation and the 3 Cs.

Click here to find out about Mega Trend 4: Urbanisation – green is the new prime.

**Source: Section 1 (publishing.service.gov.uk)

*** Source: 2022-23_EHS_Headline_Report.pdf (publishing.service.gov.uk)

**** Source: Unite Group plc FY2023 investor presentation 

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