29/11/2018 by Jason Guest
Changing Trends: Apartment Living
In October 2018, a headline in The Guardian posed a question. Examining the housing challenges faced by millennials, it noted: "A new wave of apartment blocks is springing up in the UK with shared facilities for renters. Is the future build-to-rent hotel-style housing?" As the newspaper reports, there is certainly a growing demand for long term rentals across the UK. In response, increasing numbers of developers are producing serviced apartments that promise fully furnished units and concierge-style facilities. Some of these are ambitious new-build schemes while others involve the remodelling of former office blocks, but what is evident is that such properties are rising in popularity. In this article, we'll look at some of the reasons why that might be so.
A central urban location is usually one of the biggest appeals of apartment living. City centres are where the best employment opportunities are often to be found and if you're a young, ambitious professional with a work hard / play hard mentality, then a quiet country cottage just isn't going to be the best base for you. Normally, the bulk of modern apartments will be found close to urban centres, to the big employers and all the amenities that towns and cities afford. That can be a big attraction for anyone working in high growth industries that typically cluster around the heart of a city - sectors such as banking and finance, insurance, marketing, digital media and academia. These tend to attract higher skilled, higher paid employees; people for whom the extra costs of living in the centre are outweighed by the benefits of lucrative jobs and a wealth of career opportunities.
Though apartments can come in a variety of sizes, many tend to attract younger professional couples and individual workers rather than, say, large and growing families. That clearly has something to do with the demands of people with different priorities and people who are at different stages in their lives. Apartments can be great for new arrivals who are just beginning to put down roots - a good example of which might be recent graduates. For them, a serviced apartment could represent a convenient first step after renting in a university town; a place where most of the routine household concerns are taken care of, leaving them free to concentrate on their careers and enjoying their new lives in the city.
Another source of sustainable rental demand is the retirement market. Sometimes, having sold a property in a more remote location, older couples may opt to rent closer to the facilities they need. In the process, they can free up some extra cash with which to fund their retirement, and shed their responsibilities for routine chores such as gardening and maintaining their property. For older folk who are relatively healthy and active, moving to an apartment can sometimes be a decidedly liberating experience.
House builders are often constrained by planning constraints and the limited availability of land, so it will probably always be difficult to meet the country's housing needs through the construction of conventional family homes. On the other hand, developers face far fewer restrictions when seeking to convert former offices and mills under 'permitted development' rules. This approach supports the housing of relatively
large numbers of people, often on existing or brownfield sites. Apartments therefore represent at least a partial solution to the UK housing shortage, alleviating pressure on the greenbelt and creating attractive new living spaces in areas that are often the subject of large scale urban regeneration programmes. While traditional house builders may continue to face challenges from planning departments and resistance from local residents, the supply of urban apartments is likely to grow at a much steadier pace.
There are many positive reasons why apartments have become so popular but there is no escaping the fact that some people choose to rent simply because home ownership is financially impossible. It's no secret that mortgages have become increasingly difficult to secure in recent years, and that house prices have risen far ahead of average earnings. This has become an established feature of today's property market landscape and it shows no sign of changing any time soon.
In many parts of Europe, renting has long been the norm and people will sometimes wonder about the British 'obsession' with owning their own homes. But here in the UK, it's possible that a new market reality is taking hold and that younger Britons are beginning to feel the same way. If that proves to be the case, then people's priorities may change. The objective will no longer be to rent only for as long as it takes to save enough to scrape together a mortgage deposit; the aim will simply be to find rental accommodation that delivers whatever the tenant needs to sustain a desirable quality of life.
Looking at many of those now renting urban apartments, the chief driver often seems to be nothing more than simple preference. People are choosing to rent such properties because they want to; because it suits their lifestyle and their plans for the future. An apartment leaves the tenant free and flexible; able to move with job opportunities without the constraints of home ownership. As such, it is a model for living that suits the 'gig economy' and the aspirations of ambitious professionals who don't want bricks and mortar to tie them to a particular location.
This mindset might all seem rather alien to older people for whom the ideas of a home and a mortgage were synonymous with adulthood, but it's a view that has prevailed in many other countries for generations. As The Independent recorded in April 2018, the trend for apartment living still has huge capacity for growth. It noted: "just 14 per cent of British people live in apartments. This is one of the lowest percentages in Europe. In Germany the figure is 57 per cent, in Spain it is 66 per cent, and the Euro area average is 48 per cent."
There is little doubt that apartment living is becoming an increasingly popular choice within the UK. Now, there are some very good reasons to believe that it's the start of a long term change in the market.