CMS: rental attitudes of younger generations sharply differ to baby boomers

Millennials and the iGeneration, the latter are born after 1995 and also known as Generation Z, are both prepared to pay around twice as much as the Baby Boomers to rent quality accommodation, according to a survey by CMS.

This may be due to differences in their beliefs on renting versus owning – views that are held particularly strongly in the UK, suggests CMS.

This is one of the themes which will be discussed at Thursday’s Cradle to Grave Investment Briefing in Paris. To reserve your place, please click here. We are also running another session in Berlin on September 18, please reverse your place here.

The overall spending habits of younger generations would indicate that they buy more strongly into the ‘experience economy’. This translates into paying a premium to enjoy a better lifestyle in the here and now, since home ownership is such a distant dream.

In contrast, the Baby Boomers when they were younger would have been able to get on the property ladder much earlier in their lives, since relative to wages, house prices were less. As in the office sector, the flexibility of shorter leases is increasingly attractive, particularly among younger generations. Something WeWork which has recently

entered the private rented sector, well understands.

Those heading towards or at retirement want significantly longer leases. This combined with a reluctance to spend as much as other age groups suggests many are yet to find a flexible rental product that suits them.

Urbanisation, new lifestyles, different work patterns and increasing mobility are changing Europe’s cities. What used to be referred to as ‘generation rent’ has become a phenomenon that goes well beyond a narrow demographic group.

This has prompted growing investor interest in Private Rented Sector (PRS), later living and co-living in particular. CMS’ report considers housing and demographic pressures in six key cities: London, Berlin, Amsterdam, Paris, Manchester and Glasgow.

CMS’ findings indicate that we are going to see unprecedented levels of interest and investment in all forms of rented accommodation in Europe’s leading cities. This will reshape the local housing markets from an economic and political standpoint, but more importantly will better reflect how people of all ages want to live, work and play in our cities in the future.

Together, this ‘cradle to grave’ real assets lifecycle is picking up momentum as a cohesive investment strategy.  Join Investment Briefings this Thursday, September 12, in Paris, for a seminar focused on this emerging strategy. To reserve your place, please click here. We are also running another session in Berlin on September 18, please reverse your place here.

james.wallace@realassetmedia.com